Construction Legislative Week in Review
www.agc.org May 21, 2015
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On the Inside
FEDERAL CONTRACTING
AGC-Backed Ban on Reverse Auctions Passes House Vote
Denver VA Hospital Project Faces Work Shutdown this Weekend While Congress Considers Measure to Allow Construction to Continue
TRANSPORTATION
Congress Agrees Upon Two-Month Extension for Highway & Transit Programs
Use Congressional Recess to Meet with your Legislators and Ask for Highway Funding Fix
ENVIRONMENT
Pair of Hearings Highlight Potential Impacts of Looming Waters of the U.S. Regulation
Key Senator Calls for GAO Investigation into EPA’s Grassroots Campaign in Favor of its Own Rulemaking
WORKFORCE DEVELOPMENT
Veterans Workforce Training Legislation Introduced
TAX
Permanent R&D Tax Credit Bill Passes in House
HEALTHCARE
AGC Joins Coalition Effort to Provide Comments on the ObamaCare “Cadillac Tax”
CONGRESS
AGC Offers Members an Opportunity to “Teleforum” with U.S. Senators
FEDERAL CONTRACTING
AGC-Backed Ban on Reverse Auctions Passes House Vote
Legislation Would Prohibit Reverse Auctions for Construction
 

The House of Representatives passed a provision that would help prevent federal agencies from procuring construction services through reverse auctions. Representative Richard Hanna (R-N.Y.) offered this AGC-supported provision as an amendment—which passed by unanimous voice vote—to the National Defense Authorization Act of 2016. The Defense Act – with the reverse auction ban amendment included – subsequently passed the House on a 269 to 151 vote late last week. The Act funds for the Department of Defense and has passed Congress every year for over 50 consecutive years.

The House-passed defense measure also included provisions that encourage sensible consideration of past performance records in joint ventures and teaming, prevent individual surety fraud in the construction bond marketplace and address the unintended consequences of misinterpretation of the U.S. Small Business Administration’s nonmanufacturer rule. AGC testified on these and other procurement reforms before the House Small Business Committee in February. AGC is working with members of the Senate to add similar construction procurement reform measures to its version of the Defense Act. The Senate is currently scheduled to consider the bill in June.

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

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Denver VA Hospital Project Faces Work Shutdown this Weekend While Congress Considers Measure to Allow Construction to Continue
 

The House passed, by unanimous consent, legislation to allow work on the Department of Veterans Affairs Denver Hospital Project to continue for several more weeks. The Veterans Access, Choice and Accountability Act of 2014, introduced by Rep. Mike Coffman (R-Colo.), increases funding for the project by $100 million. The Senate is expected to pass this legislation before adjourning for the Memorial Day recess. The U.S. Army Corps of Engineers recently found that the project will cost about $1.7 billion to complete, $1.1 billion more than the initial cost estimate.

The temporary extension passed its House vote shortly after AGC sent a letter to House Speaker John Boehner urging him to pass a short-term extension of funding for the project. In its letter, AGC noted that, without question, the Veterans Administration has mismanaged this project to the detriment of veterans and the American taxpayers. However, a framework is in place that will allow construction on the project to continue with the U.S. Army Corps of Engineers acting as the construction manager.  This framework should be given the opportunity to succeed before Congress walks away from a $600 million investment, AGC urged. AGC also noted that the short-term extension will provide Congress time to consider long-term reforms to the VA construction program.

AGC met with VA Secretary Robert McDonald last month to discuss AGC’s concerns with the agency’s construction program. AGC has called for significant, long-term reforms of the VA construction program and continues to meet with members of Congress on this important issue.

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

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TRANSPORTATION
Congress Agrees Upon Two-Month Extension for Highway & Transit Programs
 

Congress appears poised to send a simple two-month extension to President Obama before they leave town for their Memorial Day recess.  This short-term extension funds highway & transit programs through July 31, allowing Congress to pass a bill without finding additional money to fund the Highway Trust Fund, which is set to run out of money later this summer.

The House of Representatives has already passed the extension by a vote of 387-35 with one member voting present. The Senate is expected to pass the bill by voice vote.

Members of Congress must now work over the next eight weeks to identify additional revenue for the trust fund to pay for a 5- or 6-year reauthorization of the highway and transit bill. The Senate Finance and the House Ways and Means Committees are charged with that task and their respective Chairman, Orrin Hatch (R-Ore.) and Paul Ryan (R-Wisc.) have indicated their desire to use this time to provide a short-term Highway Trust Fund patch to the end of 2015. They feel the end of the year will provide a better opportunity to couple funding for a surface transportation bill with a larger tax package. Other members of Congress – including Senate Commerce Committee Chairman John Thune (R-S.D.) – have indicated their desire to address funding for a long-term bill over the next two months.

AGC has consistently advocated for an immediate fix to the Highway Trust Fund that would provide sustainable and growing revenue for a long-term surface transportation reauthorization bill. The two-month extension provides AGC and our members the opportunity to continue to deliver that message to members of the House and Senate through the Hardhats for Highways (focused on contractors) and Drive Better Roads (focused on drivers) campaigns.

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

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Use Congressional Recess to Meet with your Legislators and Ask for Highway Funding Fix
Use Hardhats for Highways to Spread the Message
 

Now that Congress is poised to pass a 60-day extension of highway program, the Memorial Day recess is a good opportunity for you to schedule a meeting with your Senators and Representative to educate them on the difficulties these short term extensions cause you, your business, your employees and your state. Visit www.HardhatsforHighways.com to get help scheduling a meeting and delivering a special hardhat explaining how many workers at your company rely on federal transportation funding for their job. If an in-person visit is not possible, please send an email message through the Hardhats for Highways website and have your employees do so as well. Congress needs to understand that now is the time to complete action on a long-term funding bill.

For more information, please contact Brian Deery at deeryb@agc.org or (703) 837-5319. Return to Top

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ENVIRONMENT
Pair of Hearings Highlight Potential Impacts of Looming Waters of the U.S. Regulation
 

Two different Senate committees held hearings examining the U.S. Army Corps of Engineers (Corps) and Environmental Protection Agency’s (EPA) pending rule redefining federal jurisdiction under the Clean Water Act. Both examined the impending regulation through different lenses to highlight the impact on the regulated community.

The Environment & Public Works (EPW) Committee’s Subcommittee on Fisheries, Water, and Wildlife held a legislative hearing for the Federal Water Quality Protection Act, which is the Senate’s version of AGC-supported legislation that recently passed the House. Witnesses from state and local government, businesses and the legal profession were on hand to discuss the implications of the proposed rule and comment on the legislation pending before the Committee. The EPW Committee plans to mark up this legislation shortly after the Memorial Day recess.

The Senate Committee on Small Business and Entrepreneurship also held a hearing titled, “An Examination of Proposed Environmental Regulation’s Impacts on America’s Small Businesses.” The first panel consisted of the Small Business Administration’s Office of Advocacy, the independent agency within the SBA designed to represent small businesses to other agencies in the rulemaking process. The Office of Advocacy recently concluded that EPA and the Corps improperly skipped small business consultation and should withdraw the rulemaking.

AGC will continue to push for support for the Federal Water Quality Protection Act and will monitor further progress on this issue in the Senate.

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

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Key Senator Calls for GAO Investigation into EPA’s Grassroots Campaign in Favor of its Own Rulemaking
 

Senator James Inhofe (R-Okla.), chair of the Committee on Environment & Public Works, is asking the Government Accountability Office (GAO) to launch an investigation into EPA's campaign to promote support for its rule, examining whether the agency might have violated federal lobbying laws.

The request for an investigation follows a front-page New York Times article drawing attention to the Environmental Protection Agency’s (EPA) practices since the release of its proposed rule redefining “waters of the U.S.”

The EPA and the U.S. Army Corps of Engineers have received more than one million comments on the proposed rule, and they claim nearly 90 percent favored the agency’s proposal. At a hearing exploring legislation designed to halt the rule and start over with a better one, Inhofe cited the Times article, openly wondering whether the EPA crafted a plan to characterize any criticism of the rule as “misinformation” and build support for the rule with the help of key environmental organizations and a grassroots organization affiliated with President Obama. “I've asked GAO to look into the matter,” Inhofe declared.

On its Blog, the EPA fired back, explaining the agency uses social media “to correct the record and clarify misinformation” without explaining where agency officials draw the line between legitimate industry disagreement and “misinformation.” AGC will be monitoring this situation as it develops.

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

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WORKFORCE DEVELOPMENT
Veterans Workforce Training Legislation Introduced
 

Legislation allowing veterans to use their education benefits from the GI bill for enrollment in Department of Labor-approved pre-apprenticeship programs was introduced today. The Veterans’ Entry Apprenticeship Act is a bipartisan bill co-sponsored by Representatives Martha McSally (R-Ariz.) and Tulsi Gabbard (D-Hawaii). AGC supports the legislation, along with several other construction and national veterans’ organizations.

The bill could help attract and prepare veterans for a career in the construction industry. Veterans often are ideal candidates and can help alleviate the industry’s skilled worker shortage. While the legislation will not likely be considered until later in the year, AGC will be urging additional cosponsors of the legislation and will continue to advocate for additional legislation geared at closing the skills gap in the construction industry.

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

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TAX
Permanent R&D Tax Credit Bill Passes in House
 

This week, the House of Representatives passed the American Research and Competitiveness Act of 2015 by a 274 to 145 vote. The $182 billion research & development (R&D) legislation, introduced by Congressman Kevin Brady (R-Texas), would amend the Internal Revenue Code to make permanent a modified version of the tax credit for qualified research expenses, retroactive to December 31, 2014, when the credit expired.

The Act increases the easier-to-use alternative simplified credit from 14 percent to 20 percent. In addition, the measure does not extend the traditional calculation method and its associated 20 percent credit. It would, however, make permanent the “alternative simplified method” for calculating the tax credit for qualified research expenses and generally increase the associated credit to 20 percent of those expenses that exceed 50 percent of the average qualified research expenses for the three preceding taxable years.

The R&D credit is part of a group of temporary tax breaks known as “tax extenders.” In December, Congress retroactively renewed more than 50 provisions for the 2014 tax year, but the tax breaks remain expired for 2015. Since it was introduced in 1981, the credit has been extended 16 times and has been allowed to expire nine times. When it has expired, the credit has almost always been retroactively reinstated to provide continued benefits to taxpayers. House Republicans introduced and passed a series of bills making permanent small groups of “tax extenders” in early 2015 over Democrats' objections and a White House veto threat. The White House has threatened a similar veto to the House R&D legislation due to its cost.

Meanwhile in the Senate, legislation introduced in February by Senators Tom Carper (D-Del.) and Pat Toomey (R-Pa.) to make the R&D credit permanent awaits further action in the Finance Committee, though similar legislation failed to advance in Senate last year. The “Competitiveness and Opportunity by Modernizing and Permanently Extending the Tax Credit for Experimentation Act” (COMPETE Act) would increase the credit for qualified research expenses from 20 percent to 25 percent and allow companies undertaking research in collaboration with other companies to access the credit.

AGC continues to support a permanent and expanded federal R&D credit for construction companies that have increasing responsibilities to innovate products and processes in order to secure successful bids on potential projects. Over the years, the construction industry has moved toward using innovative construction materials to create higher-performing, more reliable, energy efficient, quality structures. Customers, architects, and engineers continue to raise the bar on innovation such as HVAC systems and large-membrane filtration systems for water treatment plants; and this drives the expectation for contractors to develop new processes and engineering solutions – activities that qualify for the R&D credit.

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

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HEALTHCARE
AGC Joins Coalition Effort to Provide Comments on the ObamaCare “Cadillac Tax”
 

AGC of America joined with a broad coalition of employers, labor unions and other entities to provide detailed comments to the Treasury Department’s request for information on implementing the 40-percent excise tax on high-cost, employer-sponsored health coverage, also known as the “Cadillac Tax”. The controversial tax has been delayed until 2018, but employers – notably those with labor agreements that stretch into 2018 – are beginning to anticipate the ramifications from the tax.

The nondeductible 40-percent tax applies to the cost of “applicable employer-sponsored coverage” in excess of certain thresholds: in 2018, $10,200 for employee-only coverage and $27,500 for family coverage and linked thereafter to the consumer price index. The linking of the threshold to the index is an additional concern because the medical inflation rate has historically risen twice as fast. This will soon make the tax applicable to a broader array of plans.

AGC supports repealing the tax altogether, but absent repeal, has urged the administration to exercise flexibility in issuing the regulations. The comment letter focused on three areas: (1) the definition of applicable coverage, (2) the determination of the cost of applicable coverage and (3) the application of the annual statutory dollar limit to the cost of applicable coverage.

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

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CONGRESS
AGC Offers Members an Opportunity to “Teleforum” with U.S. Senators
 

AGC of America has partnered with several business organizations to provide its members the exclusive opportunity to hear from U.S. Senators. During these live teleforums, AGC members can ask their Senator questions about the concerns and obstacles they face every day while trying to operate a business in the construction industry.

The next teleforum will by with Senator Kelly Ayotte (R-N.H.) on June 9th. Past teleforums have included Senators Ron Johnson (R-Wisc.) and Rob Portman (R-Ohio). When teleforums are scheduled, AGC members in the Senator's state will receive an email inviting them to participate. For those unable to participate on the live teleforum or who reside outside of the state, recordings of the teleforums are available for download on AGC.org/Teleforums.

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

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