Construction Legislative Week in Review
www.agc.org March 6, 2014
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On the Inside
HARDHATS FOR HIGHWAYS
AGC Co-Chaired Transportation Construction Coalition Launches National “Hardhats for Highways” Campaign
INFRASTRUCTURE
AGC Testifies before Congressional P3 Panel
SAFETY
TAKE ACTION – Submit Comment to OSHA on Reporting of Workplace Injuries and Illnesses Rule
BUDGET
President Releases Budget Request for 2015
Revenue Proposals Released as Part of Obama Budget
Labor and Employment Initiatives Released as Part of President’s Budget
LABOR
House Committee Holds Hearing on Ambush Election Rule
AGC EVENTS
AGC PAC Sets Record and Hosts Briefing at 2013 Convention
ELECTIONS
Texas Holds Primary Elections
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HARDHATS FOR HIGHWAYS
AGC Co-Chaired Transportation Construction Coalition Launches National “Hardhats for Highways” Campaign
Get Involved at www.HardhatsforHighways.org
 

With the federal Highway Trust Fund projected to be unable to support any new highway, bridge or public transportation improvements in fiscal year 2015, the AGC co-chaired Transportation Construction Coalition (TCC) is launching a new national outreach campaign called “Hardhats for Highways.”  This campaign – which was launched yesterday in Las Vegas at CONEXPO/CONAGG, one of the world’s largest construction trade shows, where more than 125,000 industry professionals are gathered – is designed to help educate Congress about the connection between local jobs and federal highway and transit investment.  

“Hardhats for Highways” is encouraging transportation construction firms and their employees to contact their members of Congress and let them know how many local jobs depend on federal transportation funding.  As part of that campaign, we are asking you to deliver to your Senators and Representative your firm’s hardhat with the Hardhats for Highways decal indicating the number of employees impacted by the decline in highway funding.   Please also send an e-Hardhat letter to Congress to make sure your elected officials get the message.  Encourage your employees to also send an e-Hardhat message (use this payroll stuffer to educate your employees) and then inform us when you successfully deliver a hardhat so we can continue to educate members of Congress here in Washington, D.C.

You can find all the information you need to participate in this campaign at our new dedicated website, www.HardhatsforHighways.org, including background information, instructions on how to order the campaign stickers, send e-Hardhats and schedule hardhat deliveries with your member of Congress.

For more information, please contact Brian Deery at deeryb@agc.org or Brynn Huneke at brynn.huneke@agc.org Return to Top

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INFRASTRUCTURE
AGC Testifies before Congressional P3 Panel
 

On Wednesday, Richard Fierce, senior vice president at Fluor, testified in front of the House Transportation & Infrastructure Committee’s Panel on Public-Private Partnerships (P3 Panel).  The purpose of the hearing was to provide an overview on the use of public-private partnerships in highway and transit projects.  Other members on the panel included representatives from the Texas Department of Transportation, the Denver Regional Transportation Department, and the Congressional Budget Office. All of the witnesses, including Mr. Fierce, agreed that the only solution to addressing our infrastructure funding gap is to provide address the pending Highway Trust Fund solvency and provide a long-term sustainable revenue source as part of reauthorizing MAP-21.

AGC’s testimony provided the panel with some basic knowledge on P3s, along with the benefits and challenges of using P3s on transportation projects.  The specific views shared with panel include: 

P3s or any other type of innovative financing tool must be viewed as just that – a financing tool. 

Projects need to be technically feasible, publicly supported and financeable.  Any P3 project requires a reliable revenue stream for the project to be viable.

P3s are not a panacea.  Private finance may help close a funding gap, and P3 project delivery is likely to deliver more projects for a given dollar of revenue, but P3s do not eliminate all risks or possibilities for conflict or claims.  The same challenges that face a publicly funded project can also occur on a P3.  Efficient allocation of risk is important to creating P3 value. 

Good state-enabling legislation, expertise among state administrators, federal administrators (including advisors), and a track record of success will help build support for P3 development.

Congress should look to facilitate the use of P3 model contract documents similar to what is being developed by FHWA as directed by MAP-21 for collecting and disseminating best practices.

AGC supports the use of P3s and is working closely with the committee as they look into the use P3s in construction projects across the committee’s jurisdiction, including water infrastructure, federal buildings and WRDA type water projects.

For more information, please contact Sean O’Neill at (303) 547-8892 or oneills@agc.org Return to Top

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SAFETY
TAKE ACTION – Submit Comment to OSHA on Reporting of Workplace Injuries and Illnesses Rule
 

On Nov. 7, 2013, the Occupational Safety and Health Administration (OSHA) issued a proposed rule to amend its current record keeping regulations to require the electronic submission of injury and illness information. The proposed rule would require construction firms with more than 250 employees to electronically submit detailed records on a quarterly basis to OSHA, which would then be made available to the public online. OSHA is also proposing that firms with 20-249 employees be required to submit only their summary of work-related injuries and illnesses once a year.

AGC knows that OSHA already has access to this data during an inspection. However, we are concerned about potential problems with the public dissemination of this information. Our concerns include:

  • Identifying who is responsible for any website inaccuracies;
  • The possible failure to sanitize personal data of employees from the records;
  • How data will be characterized by competitors; and,
  • The possible misinterpretation of data by people lacking the construction expertise to evaluate the specifics of a reported incident.

The comment period ends Monday, March 10. AGC urges members to visit the AGC Legislative Action Center to review a draft comment template and send a copy to OSHA for inclusion in the public record.

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

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BUDGET
President Releases Budget Request for 2015
 

On March 4, President Obama released a framework for his $3.9 trillion budget request for fiscal year (FY) 2015, while more detailed budget documents are expected to be released next week.  The budget, which is $56 billion above the $1.014 trillion limit on discretionary spending established as part of December’s bipartisan budget deal, projects a budget deficit of $564 billion for 2015.  House and Senate Republicans have come out against the budget, proposing the breaking of budget caps and payment for the increase in spending by proposing tax policies that have been panned by business groups in the past, including: increasing the burden of the estate tax; retaining high rates on pass-through businesses; and taxing carried interest at ordinary income rates.

The budget outlines a four-year, $302 billion transportation bill that would increase funding by an average of ten percent from 2014 enacted levels.  It also includes several infrastructure financing provision supported by AGC, including: eliminating the volume cap on private activity bonds for water infrastructure; creating a national infrastructure bank and encouraging Congress to work on similar proposals; and providing for America Fast Forward Bonds for transportation.

In terms of federal construction accounts, the budget provides about $166 billion for FY 2015 – a 15 percent increase from 2014 enacted levels. 

There are winners and losers in the budget.  Most of the winners can be found in transportation, where the president proposes to increase both highway and transit spending.  Military construction accounts are the major losers – with cuts of over $3 billion.  A full analysis of the FY 2015 budget for federal construction accounts can be found here.

Transportation

The president laid out his framework for the reauthorization of MAP-21.  The $302 billion four-year proposal would provide an $87 billion increase over current spending levels in the Highway Trust Fund, expands the TIGER grant programs and authorizes TIFIA at $1 billion per year over the next four years.   The budget does not provide specifics on how to pay for current spending levels, let alone the extra spending proposed in the president’s request. 

The proposal would fund the Federal Highway Administration at $199.2 billion over four years – adding a new competitive grant program and new multi-modal freight programs.  The Federal Transit Administration (FTA) does very well in the new budget, which is consistent with the administration’s support in the past.  FTA would receive $72.3 billion over four years for an average spending increase of 19 percent.   Within the FTA, the new starts program would be increased from $1.94 billion in 2014 to $2.5 billion in 2015 and the Formula Grants increased by 17 percent annual average increase to $13.9 billion.

Also included in the plan is $1.25 billion per year for TIGER Grants and $1.3 billion per year for high speed rail.

Federal Construction

The president’s budget provides a mixed bag for direct federal contractors. Starting with the bad news, the president would look to dramatically cut military construction and the U.S. Civil Works accounts in FY 2015. Specifically, Army, Navy and Air Force military construction accounts would see about $1 billion reductions each under the proposal compared to the previous fiscal year. On the civil works side, the program would see about a $1 billion cut—with the construction account bearing the brunt of it with a $525 million cut—compared to the FY 2014 appropriations levels approved just six weeks ago by Congress.

The good news rests with the General Services Administration (GSA). The budget proposal would provide $2 billion for the agency’s construction accounts, representing a dramatic increase from FY 2010 through FY 2013 funding levels, where the agency saw about $300 million annually for construction. Overall, construction funding for the Department of Veterans Affairs would remain level at about $1 billion. However, the majority of funding proposed would go towards the agency’s major construction account (for projects above $10 million), a change from FY 2014 where the minor construction program saw the majority of funding.

Water Infrastructure

Once again, the president called for cuts to the Environmental Protection Agency’s (EPA) state revolving loan funds (SRFs) and the Rural Utilities Service’s Rural Water and Waste Disposal program.  As for the SRF’s – the budget provides $1.018 billion for clean water SRFs – a 30 percent cut from 2014 enacted levels.  Drinking water SRF’s would receive $757 million under the budget – a 17 percent cut from 2014 enacted levels.   The Department of Agriculture’s Rural Water and Waste Disposal Program is funded at $304 million, a cut of 34 percent from 2014 levels.

For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org Return to Top

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Revenue Proposals Released as Part of Obama Budget
 

As part of the administration’s FY 2015 Budget Request to Congress, the Department of the Treasury released the General Explanations of the administration’s FY 2015 Revenue Proposals, or “Greenbook.”

President Obama’s budget maintains a focus on taxing the high-income earners, multinational companies, as well as the oil and gas industry. The budget would alter a number of tax provisions pertinent to the construction industry, including:

Business tax reform

The budget proposes a tax reform plan that would reduce the corporate tax rate to 28 percent (with a rate of no more than 25 percent for manufacturing), and extends and modifies certain employment tax credits, including:

  • Incentives for hiring veterans - permanently extends the work opportunity tax credit (WOTC)
  • The deduction for energy-efficient commercial building property (Section 179D)
  • Renewable electricity production tax credits for electricity produced from qualified energy facilities (e.g. wind turbines, biomass)

Tax relief for small business

  • Increased expensing for small businesses – and permanently extends the 2013 Section 179 expensing and investment limitations (deduction limit of $500,000 and the $2 million level for beginning the phase-out would be indexed for inflation).

Upper-income revenue proposals for deficit reduction

  • Implements the Buffett Rule by imposing a new “Fair Share Tax” – 30 percent of AGI starting at $1 million (repeals Alternative Minimum Tax in process)
  • Reduces the value of certain tax expenditures – 28 percent cap on exclusions and deductions for high-income earners (e.g. employee contributions to defined contribution retirement plans; income attributable to domestic production activities)

Incentives for investment in infrastructure

  • Provides America Fast Forward Bonds and expands eligible uses – creates a new program that would be an optional alternative to traditional tax-exempt bonds & includes financing all qualified private activity bond categories
  • Creates a National Infrastructure Bank – calls for the creation of an independent Government entity to invest through loans and loan guarantees in a broad range of infrastructure, including transportation, energy, and water projects
  • Caps the value of the tax exemption for municipal bond interest at 28 percent
  • Allows current refundings of state and local governmental bonds
  • Eliminates the volume cap for private activity bonds for water infrastructure
  • Repeals the government ownership requirement for certain types of exempt facility bonds

Incentives to promote regional growth

  • Permanently extends and modifies the New Markets Tax Credit (NMTC)

Expands earned income tax credit (EITC) for workers without qualifying children via high-income tax “loophole closers”

  • Tax carried (profits) interests as ordinary income – would apply ordinary income tax treatment to investment services partnership interest from an investment partnership, regardless of the characterization of income at the partnership level
  • Conforms self-employment contributions act (SECA) taxes for professional service businesses (i.e. increase payroll taxes on S-corporations aka “John Edwards Loophole”)

Other revenue changes

  • Restores the estate tax parameters in effect for 2009 (i.e. top tax rate 45 percent and exclusion amount of $3.5 million with no indexing for inflation)
  • Modifies like-kind exchange rules for real property - limits deferrable amount to $1 million indexed for inflation

User fees

  • Reforms financing for the Inland Waterways Trust Fund– Secretary of the Army would set the amount of the user fee each year to collect a total of $1.1 billion from the user fee over the first 10 years. The proposal would expand the list of waterways subject to the inland waterways excise tax.

Democrats and Republicans are both calling for comprehensive tax reform; however, there are no specifics in the administration’s proposal that would bridge the debate in Congress on how to provide relief to individuals and businesses. AGC continues to consult with congressional leaders and members of the tax writing committees on proposals and legislation to address large and small businesses’ priorities for reforming the tax code.

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

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Labor and Employment Initiatives Released as Part of President’s Budget
 

The president’s FY 2015 budget contains information on the administration’s enforcement and employment initiatives. Ultimately, the budget is subject to congressional approval – where it faces considerable opposition – but it shows the administration’s priorities and illustrates how employers should prepare for greater enforcement and regulatory activity in the coming years. The Department of Labor’s (DOL) budget provides for $11.8 billion in discretionary funding, with much of it focused on the enforcement of employment laws.

Some budget highlights include:

  • $266 million ($42 million increase) for the Wage and Hour Division (WHD) and an additional 300 investigators to increase enforcement of overtime laws, family and medical leave laws, and detecting and deterring misclassification of workers as independent contractors. The budget includes $14 million for the enforcement of misclassification, including $10 million for states to identify misclassification and $4 million for new personnel.
  • $565 million ($13 million increase) for the Occupational Safety and Health Administration (OSHA), including an increase of $4 million to investigate whistleblower laws and $10.7 million for Susan Harwood training grants.
  • $108 million ($3 million increase) for the Office of Federal Contract Compliance Programs (OFCCP) and the completion of 4,290 compliance evaluations with a focus on both supply and service construction reviews. OFCCP will continue to shift its outreach strategy from being contractor-centric to worker-focused, which will strengthen its enforcement capacity in the process. In addition, the agency will also ensure that contractors and subcontractors are provided linkages to recruitment sources for hiring and advancement of minorities, women, protected veterans, and individuals with disabilities.
  • $41 million ($2 million increase) for the Office of Labor-Management Standards (OLMS) to continue efforts to advance transparency and financial integrity protections, primarily through audits, investigations and compliance assistance efforts. The OLMS is expected to release its persuader regulations this year as well.
  • $278 million ($4 million increase) for the National Labor Relations Board (NLRB), which has already proposed its “Ambush Election” rule.
  • $366 million ($4 million increase) for the Equal Employment Opportunity Commission (EEOC) whose priority continues to be litigating systemic cases and maintaining a manageable inventory of cases.
  • The Pension Benefit Guaranty Corporation’s (PBGC) underfunding for both its single and multiemployer programs. The budget notes its liabilities exceed its assets by more than $36 billion but doesn’t break it down between the single and multiemployer programs. The budget calls for authority to adjust premiums, specifically on the multiemployer side.

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

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LABOR
House Committee Holds Hearing on Ambush Election Rule
 

On March 5, the House Education and Workforce Committee held a hearing on the National Labor Relations Board (NLRB) proposed rule on representation-case procedures, also known as the “ambush election” rule. The hearing “Culture of Union Favoritism: The Return of the NLRB’s Ambush Election Rule” highlighted how the rule would undermine long-standing rights of workers, employers, and unions. 

The rule mirrors a rule proposed back in 2011.  A shortened version was finalized and took effect in 2012, but was invalidated by a court on procedural grounds shortly thereafter.  The NLRB subsequently withdrew its appeal of the court’s decision and formally rescinded the rule. To read more about the rule, please see the legal challenge and comments AGC submitted in 2011.

AGC sent a letter to the committee highlighting how the rule would be particularly difficult to apply in the construction industry due to a number of unique aspects of the industry, including the complexity of bargaining unit and voter eligibility determination, and the decentralized nature of the workplace.  AGC is presently considering its response to the re-issued proposed rule, as is the AGC-supported Coalition for a Democratic Workplace.  Comments are due April 7, 2014.

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

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AGC EVENTS
AGC PAC Sets Record and Hosts Briefing at 2013 Convention
 

AGC PAC fundraising efforts kicked into high gear at the AGC Annual Convention this week in Las Vegas, Nev., where AGC PAC surpassed its projected goal of $250,000.  At the time of this writing, AGC PAC had raised more than $310,000.  Check back next week for the official Convention total.

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

The first-in-the-nation primary vote was held on Tuesday, and few surprises were noted.  Sen. John Cornyn (R) – facing seven Republican opponents including Rep. Steve Stockman (R-TX-36) – was successfully re-nominated capturing 59.4 percent of the vote with 99.9 percent of the vote counted at this writing.  Rep. Stockman scored 19.1 percent, and Tea Party favorite Dwyane Stovall posted 10.7 percent.  

With Stockman entering late and virtually disappearing on the campaign trail and Stovall raising very little money, what could have become a serious intra-party challenge to the two-term senator fizzled.  Now, Mr. Cornyn looks forward to romping home in the general election.

For the Democrats, North Texas dentist David Alameel, a former congressional candidate, fell just short of winning the nomination outright tallying 47.4 percent to Kesha Rogers (D), 21.8 percent.  The two will advance to the May 27 run-off election.

On the House side, 12 incumbent members received primary challenges, and 11 won outright.  The only exception is 90-year old Rep. Ralph Hall (R-TX-4).  Mr. Hall will face former U.S. Attorney John Ratcliffe who notched 29 percent of the vote compared to the congressman's 46 percent.  An incumbent being forced to a run-off is never a good sign for that individual, thus Mr. Hall's chances of losing on May 27 are substantial.

Of the nine other Republicans experiencing primary competition, six-term Rep. Michael Burgess (R-TX-26) was the strongest vote-getter, tallying 82.6 percent of the GOP primary vote.  The weakest was Rep. Lamar Smith (R-TX-21), who claimed 61.1 percent.

Two Democratic members were challenged, both in the Dallas-Ft. Worth region.  Rep. Eddie Bernice Johnson (D-TX-30) easily turned back former state Rep. and Dallas City Councilwoman Barbara Mallory Caraway (D) in a 71-29 percent landslide margin.  In the 33rd Congressional District, freshman Rep. Marc Veasey (D) topped 73 percent of the vote versus wealthy businessman Tom Sanchez (D), who spent well over $1 million of his own money. 

In the open Republican 36th District, former congressional candidates Brian Babin (finishing first with 33.4 percent) and Ben Streusand (23.3 percent) will advance to the May 27 run-off from a field of twelve candidates.   

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

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