Construction Legislative Week in Review
www.agc.org February 5, 2015
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On the Inside
BUDGET
President Releases Budget Request for 2016
TRANSPORTATION
Time Left to Ask Your Rep to Sign the Bipartisan House Transportation Funding Letter
LABOR
NLRB Related Legislation in Congress
Debate on Repeal of the ACA’s 30-Hour Rule Continues in Congress
ENVIRONMENT
House and Senate Hold Rare Joint Hearing on Clean Water Act Jurisdiction
TAX
House Tax Committee Moves Bills
2016 ELECTIONS
Romney Decides Against Third Run
BUDGET
President Releases Budget Request for 2016
 

On Feb. 2, President Obama released his $4 trillion fiscal year (FY) 2016 budget request.  The budget calls for tax changes to offset increased spending for defense, infrastructure and job training and education programs.  The budget also includes tax increases for corporations and top individual earners.

The budget busts the spending caps set by the Bipartisan Budget Agreement in 2013 by $71 billion ($38 billion extra for defense and $33 billion for nondefense spending categories).  Last year, the president also proposed to bust the spending caps, but Congress rejected that request.  Republican leaders in Congress have criticized this year’s budget request.

The budget also outlines a six-year, $478 billion transportation bill and includes several infrastructure financing provisions including: eliminating the volume cap on private activity bonds for water infrastructure; adding to the eligible projects that can be financed through Private Activity Bonds; creating a national infrastructure bank; providing for America Fast Forward Bonds and expanding their eligibility; and creating Qualified Public Infrastructure Bonds.  Unfortunately, the budget also imposes a 28 percent limit on the value of the tax exemption for municipal bonds.

In terms of federal construction accounts tracked by AGC, the budget provides about $134 billion for FY 2016 – a 21 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 – and military construction accounts.  The U.S. Army Corps of Engineers Civil Works construction account is the major loser – with cuts of over $3 billion

Transportation

The budget asks for record amounts of funding for transportation infrastructure and presents the administration’s ideas for a six-year reauthorization bill with tax proposals to pay for it. Under the request, the Department of Transportation budget would increase by almost 33 percent in 2016. For the Federal Highway Administration, that would mean a 25 percent increase from $41 billion to $51.3 billion. Transit formula spending would grow almost 70 percent from $8.6 billion to $13.9 billion with the new starts program growing from $2.12 billion to $3.25 billion. The Federal Railroad Administration's budget would roughly triple to about $5 billion. The TIGER grants program would more than double from the fiscal year (FY) 2015 level of $500 million to $1.2 billion in FY 2016. The administration also proposes increasing the cap on Passenger Facility Charges (PFCs) that airlines are allowed to charge for airport infrastructure improvements from $4.50 to $8.00. In exchange for this increase, the budget proposes reducing the Airport Improvement Program (AIP) funding from this year’s $3.35 billion to $2.9 billion but only allowing the AIP funds to go to airports that do not benefit from the PFC increases.

The proposed large increase in transportation funding is part of the administration’s revised version of the Grow America Act, its proposal from last year presenting ideas for addressing MAP-21 reauthorization. That proposal was for four years at $302.3 billion using unspecified corporate tax reforms as the way to provide the additional revenue needed to support the increased funding levels. This year’s budget includes a six–year, $478.3 billion version of the Grow America Act. As with last year’s proposal, this version of the Grow America Act would rename the “Highway Trust Fund” as the “Transportation Trust Fund” and would be expanded to include funding for Amtrak, high-speed rail, mass transit new starts, administrative expenses and research, TIGER grants, and the National Highway Transportation Safety Administration’s (NHTSA) vehicle safety programs. All would receive significant funding increases. These programs are currently funded out of general fund proceeds.  The budget also proposes to increase the national limitation amount for PABS for qualified highway or surface freight transfer facilities.

To pay for the increased funding, the administration proposes a one-time tax on U.S. corporations’ earnings overseas that would be taxed at a 14 percent rate. This is proposed to generate $239 billion in revenue; however, it would need to be replaced with another revenue source after the six-year period or the transportation programs would revert back to their FY 2015 levels.

Federal Construction

A majority of major direct-federal construction accounts would see funding increases in FY 2016 compared to FY 2015 levels based on the president’s budget. With the considerable withdrawal of troops in Iraq and Afghanistan and the winding down of stimulus and 2005 Base Closure and Realignment Commission (BRAC) round funding, investments in federal facilities and infrastructure have seen steady decreases since FY 2012. The president’s budget request would generally buck this trend, despite the threat of sequestration looming for FY 2016.

The president’s budget would provide the greatest increase in funding for military construction accounts, while the greatest decrease for U.S. Army Corps of Engineers Civil Works (USACE) programs in FY 2016 compared to the previous year.  Military construction accounts would be set at $6.653 billion, a nearly $1.9 billion (40 percent) increase. The president requested $1.669 billion for the Navy and Marine Corps (a $650 million, 64 percent increase), $1.389 billion for the Air Force (a $577 million, 71 percent increase) and $743 million for Army (a $214 million, 41 percent increase) military construction accounts. The defense-wide military construction account would be increased to $2.3 billion (a $309 million, 16 percent increase). On the other side, despite increased calls for infrastructure investment, the president’s budget would cut $758 million (14 percent) from the USACE Civil Works programs, funding it at about $4.4 billion. Most significantly, the construction account would be cut to $1.172 billion (a $467 million, 28 percent cut), the operations and maintenance account would be cut to $2.7 billion (a $198 million, 6 percent cut) and the Mississippi River and Tributaries account would be cut to $225 million (a $77 million, 25 percent cut).

Turning to federal facilities, both the General Services Administration (GSA) and U.S. Department of Veterans Affairs (VA) construction accounts would see overall increases under the president’s FY 2016 budget. GSA’s construction and acquisition account would increase to $1.258 billion (a $748 million, 146 percent increase) and the repairs and alterations account would increase to $1.247 billion (a $429 million, 52 percent increase). The VA’s major construction account (for projects over $10 million) would increase to $1.143 billion (a $582 million, 103 percent increase) and the minor construction account (for projects at or below $10 million) would be cut to $406 million (an $89 million, 18 percent cut).

Water Infrastructure

The budget provided a mixed bag for 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 $1.116 billion for clean water SRFs – a 23 percent cut from FY 2015 enacted levels.  Drinking water SRF’s would receive $1.186 billion under the budget – a 30 percent increase from FY 2015 enacted levels.   The Department of Agriculture’s Rural Water and Waste Disposal Program is funded at $464.9 million, same as the enacted FY 2015 levels.

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

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TRANSPORTATION
Time Left to Ask Your Rep to Sign the Bipartisan House Transportation Funding Letter
Visit www.HardhatsforHighways.org Today
 

Time is running out for members of the House to sign the bipartisan letter, authored by Transportation & Infrastructure Committee Members Reid Ribble (R-Wis.) and Dan Lipinksi (D-Ill.), along with Ways & Means Committee Members Tom Reed (R-N.Y.) and Bill Pascrell (D-N.J.), and commit to supporting transportation funding initiatives. 

Thank you to those AGC members who have already contacted their representative and asked them to sign the letter. As of this afternoon, 278 House members have agreed to sign the letter that seeks to build momentum and send a message to Republican and Democrat House leaders that passing a multi-year transportation reauthorization bill with a sustainable funding source is a high priority in the 114th Congress. 

We encourage all AGC chapters and members to contact their representative and urge them to sign on through our Hardhats for Highways campaign.  If your representative has already agreed to sign the letter, a thank you letter will be generated for you to send.

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

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LABOR
NLRB Related Legislation in Congress
 

In addition to a lawsuit challenging the National Labor Relations Board’s (NLRB) new representation-case procedures rule (also known as the Quickie Election rule), legislation in Congress will be considered that would nullify the rule. The Congressional Review Act (CRA) is a resolution that would nullify the regulation, if passed by both chambers and signed by the president. The resolution could be introduced in the Senate as early as next week and a similar proposal will make its way through the House. The CRA is a powerful procedural tool that Congress can use to exert oversight over the administration and requires only a simple majority in the Senate, therefore eliminating the typical 60 vote threshold needed in the Senate to pass legislation. While the CRA has been used successfully once before, it would remain unlikely that the president would sign such a bill and therefore the best option for blocking the rule remains the judicial challenge.

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

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Debate on Repeal of the ACA’s 30-Hour Rule Continues in Congress
 

The House passed legislation this week that would repeal the Affordable Care Act (ACA) by a vote of 239 to 186.  The vote was decided almost entirely on party lines with no Democrats supporting it. The vote was the first repeal vote for the new Congress; however, even if the bill made it to the president’s desk, he has indicated that he would veto the bill.  The plans for a repeal vote in the Senate remain uncertain.  They may take up bipartisan legislation that replaces the ACA’s definition of a full-time employee at 30 hours-per-week with the more traditional definition of 40 hours-per-week, which passed the House earlier this year.

AGC supports changing the definition of a full-time employee for purposes of the employer mandate from 30 hours-per-week to the more traditional 40-hour work week. AGC urges members to use the Legislative Action Center to send a letter of support to their Senators.

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

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ENVIRONMENT
House and Senate Hold Rare Joint Hearing on Clean Water Act Jurisdiction
 

Members of the House Transportation & Infrastructure Committee and the Senate Environment & Public Works Committee held a joint hearing to examine the state and local impact of the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers’ proposed rule expanding jurisdiction under the Clean Water Act.

The first panel consisted of EPA Administrator Gina McCarthy and Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy and lasted more than three hours. Republicans were on the offensive, talking about the rule’s expansion of jurisdiction impacting many different sections of the economy including agriculture, construction, energy, and manufacturing.  Many focused on the Small Business Administration’s Office of Advocacy calling for the rule’s withdrawal with others bringing up maps the House Science Committee had uncovered showing possible extent of the rule’s reach.  Democrats instead chose to focus on the impacts the rule could have on water quality, branding opponents of the rule as spreading myths and misinformation and being opposed to cleaner water.

A second panel of state and local government witnesses focused the lack of consultation the agencies did and the costs of implementation that state and local governments would face under the new rule. Most did not agree with the agency witnesses’ assertion that the rule would clarify and actually reduce jurisdiction.

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

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TAX
House Tax Committee Moves Bills
 

On Wednesday, the House Ways and Means Committee voted to mark up seven expired tax provisions, aiming to make permanent certain benefits related to conservation easements, S corporations and business expensing in tax code, among other items. The House is expected to take up the committee bills next week. AGC will continue to advocate for passage of the following bills next week in the House and through the Senate:

  • H.R. 636, America’s Small Business Tax Relief Act of 2015 that creates stability for small businesses leading to their growth and expansion by making permanent increased small business expensing in the Section 179 of the tax code. The committee approved the legislation by a 24 to 14 vote.

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

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2016 ELECTIONS
Romney Decides Against Third Run
 

Last Friday, and what came as a surprise for many supporters, Gov. Mitt Romney stated that he will not pursue the White House for a third time.  Much speculation is occurring as to how this development affects the remaining GOP presidential aspirants. 

Many believe that the greatest beneficiary of Romney's departure is former Florida Governor Jeb Bush, as the impending battle between these two principals was commonly labeled as a fight for the heart of the Republican establishment.  But, such may not be so readily apparent.  Reports show that Mr. Romney, on the night of his announcement, actually met with New Jersey Gov. Chris Christie and not Bush.  Though it is not known what Romney and Christie specifically discussed that evening, it is near certain that the conversation was not about helping Mr. Bush.

Romney's decision not to run is likely a positive one for the former Massachusetts Governor and Republican presidential nominee, himself.  Though leading in virtually every early GOP poll, Mr. Romney's margin was far below what one would expect for a reigning presidential nominee.  In most surveys, he never broke 30 percent, meaning seven out of every 10 Republicans polled were consistently choosing someone other than Romney. 

Irrespective of how Romney's decision affects the eventual Bush and Christie campaigns, his absence from the field causes a void that some of the newcomer candidates hope to fill.

While it is likely that Bush will assume the early polling lead post Romney's departure, his advantage is likely to be tepid.  No candidate seems to feel that Bush's presence is so daunting to cause he or she to back away – Bush in the race is clearly not why Romney declined to run – thus, we can continue to expect a very large number of Republican candidates.  This means a very fragmented field where no one might gain a clear advantage throughout the nomination season.  If so, then an open Republican convention becomes a distinct possibility. 

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

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