Construction Legislative Week in Review
www.agc.org May 29, 2014
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On the Inside
ENVIRONMENT
New Report Finds EPA Economic Analysis of Wetlands Rule Deeply Flawed
TAX
FASB and IASB Issue Improved Converged Standard on Revenue Recognition
Second Markup for House Tax Committee
HARDHATS FOR HIGHWAYS
Come to D.C. and Participate in Hardhats for Highways
2014 ELECTIONS
Two Big Upsets in Texas Run-off Elections
ENVIRONMENT
New Report Finds EPA Economic Analysis of Wetlands Rule Deeply Flawed
 

A new report released this week is sharply critical of the U.S. Environmental Protection Agency’s (EPA) estimates of probable costs and benefits associated with the proposed rule on “Waters of the United States.” The report finds that EPA has significantly underestimated the economic impacts the rule will have on local communities and businesses.

Dr. David Sunding’s report, Review of 2014 EPA Economic Analysis of Proposed Revised Definition of Waters of the Unites States, examines the economic methodology behind the estimates. EPA has found a way to justify its significant expansion of the term “Waters of the United States” in the rule to include previously unregulated waters located in floodplains and riparian areas, ditches, and “other waters.”

Sunding, an economist on the faculty of the University of California-Berkeley and a principal with The Brattle Group, chronicles how EPA systematically excluded costs, underrepresented jurisdictional areas and used flawed methodologies to arrive at much lower economic impacts. He also examines how the lack of transparency in the report makes it difficult to understand or replicate the calculations, evaluate the underlying assumptions, or understand discrepancies in the results. Dr. Sunding concludes, “The errors, omissions, and lack of transparency in EPA’s study are so severe as to render it virtually meaningless. The agency should withdraw the economic analysis and prepare an adequate study of this major change in the implementation of the CWA.” AGC and its coalition partners in the Waters Advocacy Coalition met with the Office of Information and Regulatory Affairs (OIRA) earlier this year to present a preliminary version of Dr. Sunding’s findings in advance of the rule’s release.

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

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TAX
FASB and IASB Issue Improved Converged Standard on Revenue Recognition
 

On May 28, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) released the final standard for revenue recognition. The standard is vastly improved for the construction industry from the first iteration based largely on an intense education effort by AGC members who are active in the AGC Financial Issues Forum.  It will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. 

The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications), and improve guidance for multiple-element arrangements. More information on the standard is contained within the FASB in Focus or can be viewed in a three-part video series.

This standard has the potential to affect every company’s day-to-day accounting and, possibly, the way business is executed through contracts with customers; as such, existing terms and strategies could take on new meaning under the new standard. It is critical that your company begin to take the proactive steps to be prepared as the new standard will affect accounting and financial reporting, tax implications, and the need for updating technology and internal systems.

While the effective date may seem far off, proper preparation is essential. Revenue recognition is a critical and often complex accounting area. Executives and management want to know what to expect, so get started now. FASB staff and subject matter experts will speak on the finalized standard at the AGC Financial Issues Forum in Washington, D.C. June 19-20.

Hear from John Armour of CBIZ/MHM, a member of the newly formed FASB/IASB Joint Transition Resource Group for Revenue Recognition, as well as AICPA’s Revenue Recognition Task Force, on the latest details for the new standard to recognize revenue from customer contracts at the AGC Financial Issues Forum.

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

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Second Markup for House Tax Committee
 

On May 29, the House Ways and Means Committee convened a second meeting to mark up six more tax extenders bills. Like the previous markup, the approved legislation will seek to make the tax provisions permanent, which when combined with first set of tax extender bills approved by the tax-writing panel, would cost more than $600 billion. As expected, the committee approved an extension of 50 percent bonus depreciation, which the Joint Committee on Taxation (JCT) estimates would cost $263 billion. The same legislation would also make related changes to the corporate alternative minimum tax projected to cost $24.5 billion. The committee will also mark up bills regarding charitable contributions made from individual retirement accounts, conservation easements, and food donations that together would cost about $11 billion. Two other proposals slated for action are new - one would give individuals until tax day to make charitable contributions, rather than requiring them to be made by the end of the calendar year, while the other would cut an excise tax on private foundations.

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

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HARDHATS FOR HIGHWAYS
Come to D.C. and Participate in Hardhats for Highways
The TCC Fly-In is Only One Week Away
 

It is critical that you contact your legislators to educate them on the importance of supporting a highway bill and the affect it will have on your company and job if they do not.  The annual TCC Fly-In is the right place to share this message with your elected officials.  Join us in Washington, D.C. June 10-11, 2014.

You may also meet with your representative and senators in your district through next Friday, June 6. Find more information about setting up meetings with your members of Congress here. 

Please also take a moment to send e-Hardhat letters to your elected officials.  There are four separate letters available for you to send; we encourage you to continue to communicate with your legislators and send all four over the coming weeks.  Please also encourage your colleagues and employees to send e-Hardhat letters as well. More than 7,400 e-Hardhats have been sent to 413 congressional offices in 48 states.

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

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2014 ELECTIONS
Two Big Upsets in Texas Run-off Elections
 

Texas-4

Venerable Rep. Ralph Hall (R) who, at 91 years of age is the oldest member in the history of the House of Representatives, lost his bid for a 19th term last night in the Texas Republican run-off. Mr. Hall becomes the first federal incumbent to lose a bid for re-nomination during this election cycle.

Former U.S. Attorney John Ratcliffe (R) scored a 53-47 percent victory last night after holding Hall to 46 percent in the primary election. Rep. Hall had received endorsements from the losing candidates in the March 4 primary and was drawing renewed respect for his longevity of service, in addition to the fact that he is the last remaining World War II veteran in Congress; many believed he had the opportunity and ability to win the run-off election.

Texas-23

In a run-off election for the opportunity to oppose freshman Rep. Pete Gallego (D), ex-CIA officer Will Hurd (R) easily outpaced former one-term Rep. Quico Canseco (R) to become the official Republican nominee. In a turnout that will likely top only the 15,000 vote mark when all the ballots are tabulated in this district, Mr. Hurd scored a strong 59-41 percent victory.

From a Republican Party perspective, this was a good result. The party's chances of toppling Rep. Gallego in this swing district are likely stronger with a fresh face than the member who the new Democratic Congressman unseated in 2012.

TX-36

In southeast Texas, dentist Brian Babin (R), an unsuccessful congressional candidate in both 1996 and 1998, won the 36th District run-off with a 58-42 percent victory over Harris County businessman Ben Streusand (R). The latter is also a former unsuccessful congressional candidate.

Lt. Governor

In 2012, upstart candidate Ted Cruz (R) shocked the political world with a huge victory over the state's sitting Lt. Governor, David Dewhurst (R). After his Senatorial loss, Mr. Dewhurst made it clearly known that he would seek re-election to a fourth term for the state's powerful Lt. Governor's office.

But he, too, would suffer a crushing defeat as an incumbent being forced into a run-off, culminating with a big loss last night. The writing was on the wall in March when state Senator and radio talk show host Dan Patrick placed first with 41 percent of the vote, compared with incumbent Dewhurst's 28 percent.

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

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