Construction Legislative Week in Review
www.agc.org October 1, 2015
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On the Inside
GOVERNMENT SHUTDOWN
Government Shutdown Averted – For Now
CONGRESS
Boehner’s Retirement and the Race to Succeed Him
TRANSPORTATION
Get Congress to Pass a Transportation Bill Now
FAA Authorization Extended for Six-Months
FEDERAL CONTRACTING
AGC-Backed Procurement Reforms Pass House
AGC-Supported VA Construction Reform Passes Congress
ENVIRONMENT
EPA Rules on Ozone Levels Finalized, Tightened to 70 ppb
AGC EVENTS
National Chapter Leadership Conference Includes Hill Visits
Lean Construction Practices for Highways Added to Agenda for Highway Contractors Conference
Register for the 19th Annual AGC/CFMA Construction Financial Management Conference
Early Bird Rates End This Month for the Winter FIC Meeting
GOVERNMENT SHUTDOWN
Government Shutdown Averted – For Now
Short-Term Bill Funds Government until Dec. 11
 

 Government Shutdown Threat Postponed to Dec. 11


Yesterday, the House and Senate passed a continuing resolution and sent it to the president for his signature to ensure no lapse in government funds today, the first day of fiscal year 2016. The 10 week-stopgap spending bill, which is set to expire on Dec. 11, was passed in the Senate by a vote of 78-20 and the House by a vote 277-151.  In both chambers, the only no votes came from Republicans, who refused to support a bill that did not defund Planned Parenthood.

Congress now must strike a budget deal prior to Dec. 11 or face another potential shutdown.  It is anticipated that Congressional leaders and the White House will begin negotiations soon to set a budgetary framework that would allow for the consideration of the fiscal year 2016 appropriations bills – known as an omnibus spending package.  Reaching a deal on an omnibus will be challenging considering they will have to come to agreement on spending increases in order to avoid across-the-board sequestration cuts.

The continuing resolution provides regular discretionary funding at an annualized rate of $1.017 trillion.  That level is consistent with the discretionary spending limits for defense and non-defense categories enacted under the Budget Control Act.  Issues of interest to the construction industry include: the prohibition of federal agencies and contractors from undertaking new construction project starts; $625 million to complete construction of the Veterans Affairs medical center in Denver, Colo.; and continuing to provide MAP-21 funding levels for federal highway and transit programs.

AGC will continue to urge Congress and the administration to work towards an agreement on a budget framework that prioritizes critical federal infrastructure investments.

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

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CONGRESS
Boehner’s Retirement and the Race to Succeed Him
 

Following Pope Francis’ visit to Washington, D.C., Speaker John Boehner sent shockwaves through Capitol Hill by announcing his retirement from the speakership and Congress. First elected in 1991 to represent the 8th congressional district in Ohio, Mr. Boehner rose through the leadership ranks to serve as House Republican Conference chairman, chairman of the House Education and the Workforce Committee, House majority leader, and House minority leader before assuming the top House job. When he retires at the end of this month, he will be the 12th longest-serving speaker.

In a statement from one of his aides, the public learned that Mr. Boehner planned to retire at the end of 2014, but opted to stay following then-Majority Leader Eric Cantor’s unexpected primary defeat. The aide said, “He is proud of what this majority has accomplished, and his speakership, but for the good of the Republican Conference and the institution, he will resign the Speakership and his seat in Congress, effective October 30.”

The campaigns to replace Mr. Boehner are becoming clearer. As expected, Majority Leader Kevin McCarthy (R-Calif.) officially announced his candidacy and is considered the strong favorite. Florida Rep. Daniel Webster (R-Fla.), who was a late entry against Boehner earlier this year and a former speaker of the Florida House, is also running to give the conservative coalition a viable candidate. His main problem, however, is redistricting in Florida. If the court-ordered map re-draw is adopted, he is almost certain to lose his House seat in the 2016 elections.

Potential successors mentioned early on included Reps. Jeb Hensarling (R-Texas), Jim Jordan (R-Ohio), and Paul Ryan (R-Wisc.), but they have all removed their names from consideration. The eventual nominee will then need to secure at least 218 votes in a full House vote to become the 62nd speaker.

In the Majority Leader’s contest, now official with Mr. McCarthy vacating to run for speaker, current Republican Conference Chair Cathy McMorris Rodgers (R-Wash.) announced that she will not attempt to ascend the internal leadership ladder. This leaves Majority Whip Steve Scalise (R-La.) and Rep. Tom Price (R-Ga.) in the battle for the number two position. However, the chatter on Capitol Hill yesterday was all about a private meeting between the speaker and House Select Committee on Benghazi chairman Trey Gowdy (R-S.C.). While neither office is commenting on the meeting, the media is reporting that Mr. Boehner encouraged Mr. Gowdy to seek the No. 2 position due to leadership’s unease with the current options. It’s believed that selecting Mr. Gowdy as majority leader would help shore up Mr. McCarthy with the more conservative members in the caucus. It is unlikely that Gowdy will enter the race since he’s publicly stated that he prefers to remain in his current position as committee chairman.
 
With Mr. Scalise running for majority leader, several House Republicans have announced campaigns to replace him as House majority whip. They include: Chief Deputy Majority Whip Patrick McHenry (R-N.C.), Rep. Dennis Ross (R-Fla.), and Rules Committee Chairman Pete Sessions (R-Texas).

Elections are set for Thursday, Oct. 8. Stay tuned for the results.

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

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TRANSPORTATION
Get Congress to Pass a Transportation Bill Now
Contact your Reps – Visit Hardhats for Highways
 

Another week has passed without any progress for the House’s plan for passing a long-term highway & transit bill prior to the expiration of the current extension on Oct. 29.  Although there have been reports of negotiations between House Ways and Means Committee Chairman Paul Ryan (R-Wisc.) and Senator Chuck Schumer (D-N.Y.) on how to fund a long-term transportation bill, they have not yet reached a compromise.  The Senate has already passed a six-year bill with three years of funding.

AGC members need to continue to contact your representative and urge them to pass a transportation bill and avoid any further short-term extensions. Please visit Hardhats for Highways to deliver that message.  All members of the House of Representatives need to hear from their constituents that any further extensions are unacceptable

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

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FAA Authorization Extended for Six-Months
 

In addition to passing the continuing resolution to keep the federal government operating, Congress also passed a six-month extension of the Federal Aviation Administration spending authorization and the Airport and Airway Trust Fund taxation authority. The extension provides $1.675 billion in contract authority for the Airport Improvement Program for the first half of fiscal year 2016. This is $65 million higher than half of the FY 2015 enacted level of $3.220 billion. Originally, program funding in FY 2015 was set at $3.350 billion, but that level was cut by a $130 million rescission in the FY 2015 appropriations act. The six-month extension for FY 2016 restores half of that rescission and hopefully that funding level will be continued through the remainder of the year.

The extension was necessary because the Aviation Administration’s authorization legislation has expired and the House Transportation and Infrastructure Committee is drafting legislation to implement far-reaching administration restructuring and the six-month extension gives the committee time to complete action. Committee Chairman Bill Shuster (R-Pa.) said that “We are very close to putting something together that, as I said, will transform the air traffic control system while keeping back in government the safety and regulatory oversight to this agency to make sure that we are streamlining the certification process for our aviation industry.” The Senate has not yet taken up its version of FAA reauthorization.

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

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FEDERAL CONTRACTING
AGC-Backed Procurement Reforms Pass House
 

On Oct. 1, the House approved the conference report for the National Defense Authorization Act for Fiscal Year 2016, which includes several AGC-supported procurement reforms. These reforms would:

  • Help prevent fraud in the federal construction surety bond market by requiring that individual sureties back their bonds with real, easy to value assets—like U.S. Treasury bonds and instruments. A number of individual sureties were using hard-to-value, over-valued or difficult to liquidate assets—like coal mine refuse, vacation homes and other real property—to back their bonds. Many such sureties declared bankruptcy upon contractor default, leaving subcontractors without any means of payment.  
  • Mandate that DOD agencies—including the U.S. Army Corps of Engineers and Naval Facilities Engineering Command—consider the past performance of the individual companies in joint venture/teaming arrangements that include a small business, not merely the past performance of the joint venture.  Many federal agencies demand that the small business and its joint venture/teaming partners only submit past relevant experience that they perform together or otherwise be disqualified from consideration.  
  • Address a recent court decision that would require small business construction contractors to only purchase their materials and supplies—i.e., steel, furniture and equipment for the project— from other small businesses. Consequently, the legislative reform provides an exclusion for construction contractors from what is called the “non-manufacturer rule” meant to prevent small business manufactures from merely acting as fronts for large manufacturers through small business set-aside contracts for goods.

AGC testified in support of these reforms earlier this year before the House Small Business Committee. AGC has also lead a coalition of 15 national construction trade associations in an effort to push such construction procurement reforms through Congress. The Senate will likely consider the NDAA conference report in the next few weeks. The president is threating to veto the NDAA conference report because it does not address defense budget cuts under the 2011 Budget Control Act.  

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

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AGC-Supported VA Construction Reform Passes Congress
VA Projects Above $100 Million Go Through Army Corps
 

Both chambers of Congress recently approved legislation that will require the U.S. Army Corps of Engineers (USACE)—or other federal construction owner—to execute U.S. Department of Veterans Affairs (VA) construction projects over $100 million. AGC sent a letter urging members of Congress to support the Department of Veterans Affairs Expiring Authorities Act of 2015, which passed the Senate by unanimous consent on Sept. 25 and passed the House on a 423-0 vote on Sept. 30. The president is expected to sign the measure into law, which would apply only to new projects, not projects currently under development or construction.

The act also increases the authorized funding level for the Aurora, Colorado VA Hospital Project.  In conjunction with this increase in authorization level, the congressionally-approved continuing resolution that funds the government through Dec. 11 also includes a provision that provides the VA an additional $625 million. The project is expected to cost $1.7 billion, which is nearly three times what the agency planned to spend in 2011.

Earlier this year, AGCcalled for another, well-qualified federal construction agency to execute major construction projects for the VA. AGC also met twice with VA Secretary Robert McDonald to voice our concerns with the agency’s construction program.

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

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ENVIRONMENT
EPA Rules on Ozone Levels Finalized, Tightened to 70 ppb
 

EPA released its new stricter National Ambient Air Quality Standards (NAAQS) for ozone pollution, dropping the permissible levels from 75 parts per billion (ppb) to 70 ppb. The new rule is drawing criticism from industry. As AGC’s comments on the proposed version of the rule point out, the 75 ppb standard was only recently set, back in 2008, and the implementing guidance was not finalized until February 2015. Under the new 70 ppb standard, 241 counties will be in violation, using 2012-2014 monitoring data. However, EPA notes that they will likely use 2014-2016 data when they designate areas of nonattainment.

Construction companies will feel the effects of tighter ozone limits, mainly via restrictions on equipment emissions in areas with poor air quality (direct impact), as well as additional controls on industrial facilities and planning requirements for transportation-related sources (indirect impact).  Notably, nonattainment counties that are out of compliance with CAA ozone standards could have federal highway funds withheld.

The new rule is also drawing criticism from the environmental community, many of which are disappointed that the level was not set at 65 or 60 ppb. Some have already threatened lawsuits. AGC will be continuing to work with industry coalition partners on this issue, and will be doing a deep analysis of the new rule and its practical impacts for the construction industry over the coming weeks – look for this analysis in the AGC Environmental Observer.

For more information, please contact Leah Pilconis at pilconisl@acg.org or Melinda Tomaino at tomainom@agc.org Return to Top

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AGC EVENTS
National Chapter Leadership Conference Includes Hill Visits
AGC Members Visit with More Than 100 Members of Congress
 

This week, AGC chapter leaders finished up their annual meeting in Washington, D.C. with visits to Capitol Hill.  Thank you to everybody who participated in hill visits and met with your members of Congress.  With more than 100 meetings scheduled, AGC members spoke to congressional offices about passing a long-term highway & transit bill, blocking the EPA rule that expands federal jurisdiction for waters and wet areas, passing comprehensive tax reform and improving Multiemployer Pension Plans.

For more information, please contact Jeff Shoaf at shoafj@agc.org or (202) 547-3350. Return to Top

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Lean Construction Practices for Highways Added to Agenda for Highway Contractors Conference
October 10 Hotel Deadline Approaches
 

Lean construction practices have had a major impact on productivity in the vertical sector of the construction industry. Highway, bridge and other horizontal construction activities can benefit by using these principles. The Highway Contractors Conference, held Nov. 5-7 in Phoenix, Arizona, will now feature a presentation on how to make your company more profitable by applying lean construction principles to your company’s operations and specific job applications.  Jeff Esgar and Andrew Apostolk, both of Sundt Construction Co, will explain what is lean and how it can work for you. Esgar and Apostolk have experience with using lean construction on vertical and horizontal projects and are active in AGC of America’s Lean Construction training.   

Other speakers will address a host of cutting-edge developments that will impact the highway, bridge, transit, and rail now and in the future, including:

  • Will Congress be able to finalize work on a long term transportation bill with increased funding in an increasingly crowed fall Congressional agenda?
  • A Strong Federal Role vs. Devolution: Setting Transportation’s Future- Heritage Foundation and Capitol Hill advocates will debate this fundamental question.
  • Future trends in technology for transportation construction: where is the industry heading? – Autodesk Spokesman
  • Texas, Iowa and New York AGC chapters will describe how they have organized successful campaigns to increase state transportation revenue.
  • Communications experts will discuss how social media and digital advertising is crucial in getting public support for transportation infrastructure investment.
  • How are contractors addressing the many challenging aspects in building large scale transportation infrastructure projects; Tappan Zee and Gerald Desmond bridge projects?
  • TED Talks: What is of concern to the next generation of construction managers?
  • Using technology to protect your workers in the work zone.
  • Ritchie Brothers golf tournament and night time “food truck and golf competition.”

To register online, reserve your hotel room and find out more about the 2015 Highway Contractors Conference, please visit meetings.agc.org/highway.

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

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Register for the 19th Annual AGC/CFMA Construction Financial Management Conference
Hotel Deadline Oct. 12 – Reserve Your Room Today!
 

AGC and the Construction Financial Management Association (CFMA) will jointly hold the 19th Annual AGC/CFMA Construction Financial Management Conference on Nov. 4-6, 2015 at Caesars Palace in Las Vegas. This three-day conference offers programs and workshops designed specifically for financial professionals in the construction industry. The 32 interactive sessions will cover the latest industry issues and their financial implications.

Participants may earn up to 20 continuing professional education (CPE) credits for attending. 

For more information, please visit meetings.agc.org/agc_cfma or contact Brynn Huneke at brynn.huneke@agc.org Return to Top

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Early Bird Rates End This Month for the Winter FIC Meeting
 

AGC has opened early-bird registration for the Winter 2016 AGC Financial Issues Committee Meeting at Gainey Ranch in Scottsdale, Ariz. on Jan. 13-14, 2016. The meeting agenda and activities will be circulated in the coming weeks. Please visit the site to register as well as view presentations and agendas of recent meetings.

Approximately 40 member company CFOs and other senior accounting professionals regularly attend the AGC FIC meetings.  The Committee is geared toward member company CFOs, Controllers, Tax Directors and other senior accounting professionals – in which attendees have an opportunity to learn as well as formulate positions on tax and accounting matters that directly affect AGC member companies. Attendees also have an opportunity to network and discuss a wide variety of topics, including: audit issues faced by construction companies; congressional action on tax policy; and an economic outlook for the industry.

Presentations and Segments include:

  • Overview of projects and operations with FASB                                      
  • Economic Update with AGC Chief Economist
  • Legislative & Presidential Update with AGC Government Affairs Staff              
  • CFO Discussion with Zurich North America on the Surety Perspective on Enterprise Risk Management. Moderated by D.A. Davidson & Kraus-Anderson Construction
For more information, please visit meetings.agc.org/fic or contact Brian Lenihan at lenihanb@agc.org Return to Top
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