Construction Legislative Week in Review
www.agc.org November 12, 2015
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On the Inside
TRANSPORTATION
Transportation Bill Conference Committee Begins
SAFETY
OSHA Civil Penalties Increase Signed Into Law as part of Budget Act
FEDERAL CONTRACTING
Congress Passes Defense Bill; President to Sign into Law
TAX
Brady Wins Tax Gavel Extenders are a Priority
Legislators Debate New PABs Category for Buildings
2016 ELECTIONS
Round 4: Carson & Trump Remain on Top
AGC EVENTS
Register Now for the 2016 Federal Contractors Conference
AGC Winter Financial Issues Committee Meeting
2015 AGC/CFMA Construction Financial Management Conference a Success
Successful 2015 AGC Highway Contractors Conference Held in Phoenix Last Week
AGC and Sage Begin Surveying Members for Annual Outlook
TRANSPORTATION
Transportation Bill Conference Committee Begins
Contact your Congressmen and Tell Them to Support a Long-Term Bill
 

This week, select members of the House and Senate –called conferees – began negotiations on resolving the differences between the two chambers’ long-term highway & transit bills.  However, with funding levels and duration yet to be agreed upon, negotiations are off to a slow start, which could result in yet another short-term extension if Congress does not reach a deal by November 20.  AGC – along with our members and chapters – has been a leader in the reauthorization process and advocated for the construction industry’s priorities in a letter to all conferees, detailing which provisions and policies should be included in a final transportation bill.  Please visit Hardhats for Highways and send a letter to your members of Congress, urging them to support a long-term highway & transit bill.

As reported in last week’s newsletter, the House bill included additional revenue that could potentially be used to fully fund either a five-year bill at levels above the Senate-passed DRIVE Act or a six-year bill at flat funding levels equal to what the House-passed STRRA included.  AGC joined other transportation stakeholders in sending a letter to House and Senate leaders and the conferees asking for a shorter authorization and increased funding levels.  As of this afternoon, no decision has been made on how Congressional leaders plan on using the additional revenue from the House provision.

AGC will continue to work with Congressional leaders and conferees to ensure that the final transportation bill provides increased funding levels and includes policies and priorities important to the construction industry.

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

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SAFETY
OSHA Civil Penalties Increase Signed Into Law as part of Budget Act
 

As previously reported by AGC, the Bipartisan Budget Act was a two-year budget agreement that Present Obama signed into law on Nov. 2. The bill included a provision that repeals the prohibition against adjusting the Occupational Safety & Health Administration (OSHA) civil penalties for inflation.  Unlike other similar federal civil penalties – which are covered by the Federal Civil Penalties Adjustment Act of 1990 – the OSHA civil penalties have been explicitly exempted from inflation since 1990.  This means that OSHA penalties will now increase for the first time in 25 years.

Under the new law, OSHA will now have to report on their adjustment in their annual financial statements and via the Government Accountability Office. The law also allows the agency to use a “catch up” formula to make up to 150 percent adjustments in the penalty in the first year to meet current inflation levels. The secretary could limit the increases if it’s determined that a negative economic impact outweighs the benefits, with any proposed increase in penalties required to go through the formal notice and comment process. Despite the secretary’s discretion and rulemaking procedures, it is unlikely that OSHA would increase the penalties to less than the maximum allowed under law in 2016.

The inflation calculation from October 1990 and October 2015 is around 80 percent (the October 2015 inflation rate will be released November 17 and October 2015 is the date that law uses). The law allows OSHA to issue the new penalty rates for 2016 through an interim final rule and without a formal notice and comment period. Using the estimates of inflation and the laws language, it can be reasonably expected that in early 2016 (no later than August 2016) the new penalty structure for OSHA penalties will be:

OSHA Penalty Schedule

Penalty

Current Law

New Law Estimates
(Effective early 2016)

“Willful” and “Repeated”

Maximum: $70,000

Maximum: $126,000

“Serious”

Maximum: $7,000

Maximum: $12,600

 

Many Congressional Democrats and the administration have been advocating for higher penalties for several years. However, the provision included in the budget bill never received Congressional debate and was used as a provision to increase revenue by $1.3 billion over ten years. The revenue from OSHA enforcement does not return to OSHA. Rather, it goes to the U.S. Treasury. AGC will continue to monitor the implementation of the new OSHA penalty schedule and will comment as appropriate during the rulemaking process.

For more information, please contact Jim Young at youngj@agc.org or Kevin Cannon at cannonk@agc.org Return to Top

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FEDERAL CONTRACTING
Congress Passes Defense Bill; President to Sign into Law
AGC Federal Procurement Priorities to Become Law
 

Both the House (last week) and Senate (this week) overwhelmingly passed the National Defense Authorization Act of FY 2016 (NDAA Bill), a bill the president vetoed just two weeks ago. The president is expected to sign the bill into law as a result of the bipartisan budget agreement reached two weeks ago. Compared to the vetoed version of the bill, this NDAA bill has slightly lower levels of spending for Department of Defense programs.

As previously reported, the NDAA bill includes several AGC-backed federal procurement reform provisions that would help prevent individual surety fraud, allow joint ventures to submit individual businesses’ relevant past performance evaluations as part of their proposals—not merely the relevant past performance of the joint venture itself—and fix a recent court decision that would have required small business construction contractors to purchase all their materials and supplies from other small businesses. 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.

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

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TAX
Brady Wins Tax Gavel Extenders are a Priority
 

Last week, the House Republican Steering Committee met and selected Rep. Kevin Brady (R-Texas) as the next Ways and Means Chairman, replacing the former chairman Rep. Paul Ryan (R-Wis.) who was elevated by his colleagues to become the Speaker of the House. The race to replace Chairman Ryan was the closest watched gavel race in recent memory, pitting two veteran panel members, Reps. Brady and Pat Tiberi (R-Ohio) against each other. AGC sent a letter to Chairman Brady congratulating him on his victory, as well as outlining AGC’s tax, health and pension policy priorities.  Rep. Tom Rice (R-SC), a CPA and tax lawyer, was selected to fill the committee vacancy left by the departure of Speaker Ryan.

Chairman Brady told Tax Analysts that he wanted to get something done “sooner rather than later. Whether it is a permanency package, which I'm driving for, or if that's not possible, a two-year extension. But I have to make some visits with our leaders.” The Wall Street Journal had an interview with the new chairman, where Brady made clear he wants to move a robust tax extender package this fall then spend next year pushing the "step one, step two" plan for tax reform outlined by Paul Ryan in the past year.

The expired tax provisions are likely to be included in the last revenue bills headed for completion at the end of the year… riding on a conferenced highway bill that the House and Senate will hash out over the next two weeks or along with a likely omnibus spending package needed by mid-December. AGC has been actively lobbying for the renewal of the expired tax provisions for the industry for at least three years, pushing a renewal deadline past the presidential elections and in to early 2017. The concern between now and the end of the year is that Congress will only retroactively renew the 2015 provisions (a redux of the scenario that played out in 2014).

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

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Legislators Debate New PABs Category for Buildings
 

AGC was instrumental in advancing the debate for a private activity bond (PAB) provision during the debate on the surface transportation reauthorization and funding measure last week in the House. The Performance Based Building Coalition is promoting the creation for a new category of Exempt Facility Bonds for public buildings (e.g. courthouses and universities) that would utilize public-private partnerships (P3s) to advance public projects and unlock the doors for private investment in our nation’s public building infrastructure.

During the debate for adding financing provisions to the House version of the highway bill, AGC and coalition partners were able to introduce a PABs amendment offered by Rep. Lee Zeldin (R-N.Y.). During the consideration phase at the House Rules Committee. The amendment’s merits were considered favorable, but due to a procedural House Budget rule known as Pay-Go, the amendment was not added to the underlying bill for debate on the floor. The Joint Committee on Taxation, the official scorekeepers, gave the PABs amendment a low budgetary impact score, due to the fact that Exempt Facility Bonds for public buildings would decrease the amount of tax-exempt debt at the state and local levels. With the momentum of a bill sponsor, favorable budget score, and support from various key members of Congress, AGC will continue to promote the financing legislation in upcoming must-pass legislation toward the end of the year.

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

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2016 ELECTIONS
Round 4: Carson & Trump Remain on Top
 

Despite early criticism for utilizing a poll from a less-than-respectable firm that pushed Lindsey Graham out and demoted Chris Christie and Mike Huckabee to the undercard stage, the Fox Business Network received record ratings Tuesday night when 13.5 million viewers tuned in for the fourth primetime GOP presidential debate. 

There was a remarkable difference between this debate and the pervious one hosted by CNBC in terms of the quality of questions posed and candidate responses.  Moderators – Neil Cavuto, Maria Bartiromo, and Gerard Baker – focused their questioning mainly on taxes, but also included such topics as domestic job growth, entitlements, foreign policy, and Wall Street/banks.

With only eight candidates on stage, Jeb Bush, Ben Carson, Ted Cruz, Carly Fiorina, John Kasich, Rand Paul, Marco Rubio, and Donald Trump had more time to present their economic policies and rebut most challenges.  While pundits and voters could not agree on one winner, there was consensus on who did not have a good night – Gov. Kasich.  A focus group of New Hampshire Republicans agreed, giving him the least favorable reaction ever recorded in a Frank Luntz focus group.  Such news must be troubling for the Kasich campaign as the governor had risen to fourth place in the Granite State leading up to the debate.

Because there was no major “breakout moment” or serious gaffe made, Carson and Trump continue as the field’s current frontrunners.

The remaining 2015 debates include:

  • November 14 – Democratic Debate hosted by CBS, KCCI, and the Des Moines Register (Iowa)
  • December 15 – Republican Debate hosted by CNN and Salem Radio (Nevada)
  • December 19 – Democratic Debate hosted by ABC and WMUR (New Hampshire)

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

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AGC EVENTS
Register Now for the 2016 Federal Contractors Conference
Save $75 on Registration Fee
 

Register today for the 2016 AGC Federal Contractors Conference (FEDCON) and save $75 off the registration fee. FEDCON is the premier conference for federal construction contractors to discuss the latest projects, policies and contracting issues facing the industry with federal agencies, including the U.S. Army Corps of Engineers, Naval Facility Engineering Command, Air Force Civil Engineer Center, General Services Administration, Department of Veterans Affairs, Department of State, Natural Resources Conservation Service, and Bureau of Reclamation.

In addition to substantive discussions and presentations with federal agencies, attendees will hear from legal experts about the latest federal regulations that will impact their businesses and may have the opportunity to continue a dialogue with federal agencies after the conference. During the Federal Law and Regulation Workshop, leading federal construction attorneys will address executive orders, Small Business Administration and Federal Acquisition Regulation rules, and case law trends your company needs to know to work in the federal market. And, when the conference concludes, AGC member attendees will have the opportunity to participate in ongoing dialogue and meetings with agency headquarters later in the year.

For more information and to register, go to http://meetings.agc.org/fedcon/ Return to Top

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AGC Winter Financial Issues Committee Meeting
 

Register for the AGC Financial Issues Committee (FIC) Winter Meeting held at the Hyatt Regency Resort & Spa at Gainey Ranch in Scottsdale, AZ scheduled for January 13-14, 2016. Please visit the meeting’s site to register as well as view presentations and agendas of past meetings.

The meeting is geared toward the CFOs, Treasurers, Finance Directors, Controllers, Tax Directors and other senior accounting professionals of AGC member companies of all sizes and specialties. Members have an opportunity to learn as well as formulate positions on tax and accounting matters that directly affect their bottom line and operations. Current FIF projects include helping construction companies to prepare for the new Revenue Recognition Accounting Standard Update that goes into effect in 2017.

Meetings center around discussions with FASB reps, congressional representatives, practitioners, and financial officer breakout groups on topics including internal controls, project performance reviews and using technology like Box.com in operations or accounting functions. 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.

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

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2015 AGC/CFMA Construction Financial Management Conference a Success
Save the Date! Oct 19-21, 2016 | Las Vegas, Nevada
 

Last week, over 480 construction company owners, CFOs, CPAs and consultants attended the successful 19th Annual AGC/CFMA Construction Financial Management Conference, jointly sponsored by AGC and the Construction Financial Management Association (CFMA). During 32 interactive sessions over the three-day meeting, owners and financial professionals heard from leading experts in the fields of accounting, tax, financing, IT, insurance and sureties, health care, fraud, workforce strategies, contracting, claims and risk management.

Speakers included Alex Lee from Wills Company; Greg Hesser from Alberici Group and Dean Doige from Clark Builders; Cullen Walsh from FASB; Erin Roberts from Ernst & Young, LLP and Anthony Ivener from Ivener Management Group.

Mark your calendars for the 20th Annual AGC/CFMA Construction Financial Management Conference, which will be held October 19-21, 2016 at Caesars Palace in Las Vegas, Nevada.

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

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Successful 2015 AGC Highway Contractors Conference Held in Phoenix Last Week
Save the Date! Nov. 3-5, 2016 | Phoenix, Arizona
 

Last week, over 100 construction company owners, suppliers and industry partners who perform work in the highway & transit markets attended the 2015 AGC Highway Contractors Conference. The two-day meeting featured presentations and discussions on drones, workforce issues, transportation funding, technology updates and project delivery.

Mark your calendars for the 2016 AGC Highway Contractors Conference, which will be held November 3-5, 2016 at the JW Marriott Desert Ridge in Phoenix, Arizona.

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

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AGC and Sage Begin Surveying Members for Annual Outlook
Help Us Generate a Comprehensive Outlook for 2016 by Taking the Survey Today
 

Each year around this time, AGC asks you – our members – to predict what next year will be like for your business.  This year AGC has partnered with Sage to prepare questions that focus on expectations for market performance, hiring, labor market conditions, etc.  Please take a moment to complete the survey here at https://www.surveymonkey.com/r/2016AGCBusinessOutlook

We will spend November and December asking members to complete the survey.  After that we will work with AGC’s chief economist Ken Simonson and the team from Sage to analyze the results, which we will release in early January to the media and members. As in the past, we will also prepare state-specific outlooks for every state where we have a sufficiently robust response. 

Thanks in advance for all your help and support, and please contact Brian Turmail at turmailb@agc.org with any questions. Return to Top

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