Construction Legislative Week in Review
www.agc.org February 4, 2016
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On the Inside
2016 ELECTIONS
Cruz, a Tie, and Rubio the Surprise
Paul Suspends Campaign
WATER INFRASTRUCTURE
AGC-Supported Water Infrastructure Trust Fund Legislation Re-Introduced
LABOR
Equal Employment Opportunity Commission Proposes to Add Pay Data and Hours Worked to EEO-1 Report
FEDERAL CONTRACTING
AGC Submits Comments on Proposed FAR Rule
TRANSPORTATION
Comments on Every Day Counts Initiative
FAA Reauthorization Introduced in the House
TAX
Tax Committee Hearing Emphasizes Need for Tax Changes
AGC EVENTS
AGC 97th Annual Convention Preview
Federal Contractors Conference Early-Bird Rate Extended to 2/12
2016 ELECTIONS
Cruz, a Tie, and Rubio the Surprise
 

The Iowa Caucuses ended in a bit of a surprise. Despite the last ten public Republican contest polls all finding Donald Trump leading the Iowa vote anywhere from one to eight points, it was Sen. Ted Cruz (R-Texas) who claimed first place Monday night with 28 percent preference. Mr. Trump finished a close second with 24 percent, followed by Sen. Marco Rubio’s (R-Fla.) stronger-than-expected 23 percent.

It is the latter number that few saw coming. Sen. Rubio had been consistently scoring a third place finish in most polls, but a distant one. Of the final 10 Iowa polls from nine different pollsters, cumulatively conducted during the January 18-31 period, only two forecast Rubio in as formidable a third position as actually occurred.

The Democratic side turned out equally interesting. In their much different system where voters’ choices translate into state delegates for each candidate, it is former Secretary of State Hillary Clinton and Sen. Bernie Sanders ending in a virtual tie. The two split the delegate pool almost evenly, with Clinton leading by only four delegates from a pool nearing 1,400.
 
Former Maryland Governor Martin O’Malley, who scored just eight delegates, suspended his campaign. The same is true for the 2008 and 2012 GOP Iowa Caucus winners, ex-Arkansas Gov. Mike Huckabee and former US Sen. Rick Santorum. Mr. Huckabee finished ninth among Republicans with just 2 percent voter support. Mr. Santorum, who beat former Massachusetts Gov. Mitt Romney in 2012, came in eleventh. Santorum has since endorsed Rubio.
 
The Republican turnout was the largest in Iowa Caucus history. The participation factor topped 185,000, far more than the previous record of 121,255 established in 2012. The Democratic system does not report the actual number of raw votes per candidate, instead using only the candidates’ delegate totals.
 
The Caucus result proved close to what was projected a month ago, meaning Cruz took the state because the system was tailor-made for his strong grassroots campaign style. Expectations for Trump rose during the latter part of January, largely attributable to virtually every public poll suggesting he would finish first.
 
The fact that no candidate even reached 30 percent, let alone the 50 percent needed to capture the majority of delegates, suggests that yielding a contested Republican convention is certainly a possibility. Now having three candidates with similar strength is another element that potentially makes an eventual deadlock more likely.

Donald Trump, rebounding to finish first in New Hampshire coupled with a strong showing from a candidate such as Governors Jeb Bush, Chris Christie, or John Kasich would further cloud the overall political picture. Such a result would make reaching a majority even more difficult for any of the contenders.

The Iowa Caucus met expectations for excitement with two close finishes. The Republican delegate allotment for Iowa is only 30. This means Cruz scored just one more delegate vote than Trump and Rubio. Ms. Clinton amassed 23 delegates to Sanders' 21.

Next comes the New Hampshire primary on Feb. 9.

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

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Paul Suspends Campaign
 

Kentucky U.S. Sen. Rand Paul suspended his presidential campaign Wednesday morning following a disappointing finish in the Iowa Caucuses. Paul placed fifth garnering just 4.5% of the vote behind US Sen. Ted Cruz (27.7%), Donald Trump (24.3%), US Sen. Marco Rubio (23.1%), and Dr. Ben Carson (9.3%). Despite a continued effort to not only preserve, but to expand his father’s coalition, Paul received less caucus votes than former US Rep. Ron Paul did in 2008 (10%) and 2012 (21%).

As the candidates turn their attention to New Hampshire, which holds its primary on Tuesday, Paul faced the possibility of an even more disappointing finish. Currently, the RealClearPolitics Average of the most recent state polls has him in ninth place with 2.8%, besting two candidates who have already suspended their campaigns - former Governor Mike Huckabee and former US Sen. Rick Santorum.

Simply put, Trump’s presence as a loud, anti-establishment outsider in the race and front-and-center national security issues on the nightly news proved to be major factors the Paul campaign failed to overcome.

Paul will now head home to prepare for his 2016 Senate re-election. Without a top-tier Democratic candidate in this Kentucky race, he is expected to easily win this November.

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

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WATER INFRASTRUCTURE
AGC-Supported Water Infrastructure Trust Fund Legislation Re-Introduced
 

Representatives Earl Blumenauer (D-Ore.), John Duncan (R-Tenn.), and Richard Hanna (R-N.Y.) introduced the Water Investment Trust Fund Act. This legislation will provide a small, deficit-neutral, protected source of revenue to help states replace, repair, and rehabilitate critical clean and drinking water facilities by creating a voluntary system that would allow businesses that rely on a clean water source to contribute to the fund.

Manufacturers of products that use significant amounts of water in production or produce materials that require special filtration from wastewater could choose to add a surcharge per unit to their product to be deposited in the trust fund. In exchange, manufacturers would be allowed to display a medallion or label on their products indicating that purchase of the product helps contribute to America’s clean water infrastructure.

AGC and its industry partners in the Water Infrastructure Network have been active and strong supporters of Congressman Blumenauer's Clean Water Trust Fund approach and strongly support the Water Infrastructure Investment Act. AGC will continue to recruit additional co-sponsors and build support for this measure.

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

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LABOR
Equal Employment Opportunity Commission Proposes to Add Pay Data and Hours Worked to EEO-1 Report
 

The U.S. Equal Employment Opportunity Commission (EEOC) announced a proposal that would revise the Employer Information Report (EEO-1).  The new report would require all employers with 100 or more employees to submit compensation data and hours worked in addition to the racial, ethnic and gender status data currently required by the federal government.  The new form would also apply to federal contractors with more than 100 employees, and, if implemented, will replace the Office of Federal Contract Compliance Program’s (OFCCP) proposed Equal Pay Report for federal contractors

According to the EEOC’s website, the new data required by the report “would provide the EEOC and OFCCP with insight into pay disparities across industries and occupations and strengthen federal efforts to combat discrimination.”  A copy of the proposal is available in the Federal Register.  AGC is preparing to submit comments on the proposed changes before the April 1 deadline.

For more information on the proposed revisions to the form, including a Fact Sheet for Small Business and a Question and Answer document, visit the EEOC website.  ​

For more information, please contact Tamika Carter at cartert@agc.org or (703) 837-5382. Return to Top

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FEDERAL CONTRACTING
AGC Submits Comments on Proposed FAR Rule
Includes Duplicative Debarment for Late Taxes and Crimes
 

AGC filed comments this week on a Federal Acquisition Regulation (FAR) Council proposed rule that would prohibit federal agencies from entering into a contract with any corporation that has a delinquent federal tax liability or a felony conviction under any federal law, unless (1) the agency has considered suspension and debarment of the corporation and (2) has made a determination that such action is unnecessary. 

In its comments, AGC explains why this proposed rule is unnecessary and should be withdrawn because existing statutory and regulatory frameworks already in place that levy penalties, including incarceration, for violating federal tax and criminal law. Additional protections also exist to protect the public interest through the suspension and debarment process. In the event the FAR Council moves to issue a proposed rule, AGC puts forth several concerns that must be addressed: (1) defining the term “corporation;” (2) ensuring the finality of criminal convictions for disclosure; and (3) preventing bureaucratic delays from impacting the economy and efficiency of the federal procurement process.

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

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TRANSPORTATION
Comments on Every Day Counts Initiative
 

AGC submitted comments to the Federal Highway Administration (FHWA) on its fourth solicitation for the Every Day Counts (EDC) initiative. AGC supported the Administration’s proposal to include construction partnering in the initiative, demonstrating past success through partnering and emphasizing the need for renewed focus as partnering with certain state DOTs has become too routine and has lost its effectiveness.

AGC also encouraged the Administration to push for increased use of GeoTech tools and enhanced geotechnical characterization that more clearly define underground conditions in the design phase to expedite project delivery and reduce changes, claims and disputes. The comments questioned one FHWA recommendation advocating more extensive use of surface treatments to extend pavement and bridge life suggesting that surface treatments can mask more significant subsurface distresses that can lead to more extensive and costly repairs in the future.

AGC also asked the Administration to revisit its previous initiative on the use of Alternative Technical Concepts (ATCs) suggesting that to keep this innovative concept viable, FHWA should assist in developing criteria for DOTs to make it clear to the industry what they are willing to accept in ATC proposals, as contractors often find they are submitting proposals that are not given full consideration by DOTs. The comments also called for more emphasis on the interoperability of software to allow for greater adoption of E-construction. Finally, AGC suggested the Administration look at new anti-intrusion devices that have been developed to give workers in the work zone early warnings to help protect them when there is a third party intrusion.

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

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FAA Reauthorization Introduced in the House
 

Yesterday, Transportation & Infrastructure Chairman Bill Shuster (R-Pa.) introduced the Aviation Innovation, Reform, and Reauthorization (AIRR) Act of 2016.  The bill would authorize programs run by the Federal Aviation Administration (FAA) through fiscal year 2022.  The FAA has been operating under a number of short-term extensions with the current one expiring on March 31.  The bill includes provisions closely tracked by AGC including airport infrastructure funding and financing, and the regulation of the commercial use of drones.

Modernizing the nation’s air traffic control system is the main piece of the bill and the most controversial. The bill creates an independent, not-for-profit corporation that would set user fees (replacing current taxes) that would fund much of the air traffic control system. The creation of this new corporation is supported by the air traffic controllers union and most major airlines.  However, concerns have been raised by bipartisan members of the House and Senate appropriations committee and Ranking Transportation & Infrastructure Democrat Peter DeFazio (D-Ore.), who plans to offer up an alternative to the AIRR Act. 

Throughout the reauthorization process, modernizing airport infrastructure financing and increasing funding for the Airport Improvement Program have been priorities of AGC.   Unfortunately, the bill fails to modernize the Passenger Facility Charge (PFC), keeping the current cap of $4.50 per trip in place.  Despite not increasing the cap, the AIRR Act allows airports to impose $4.50 PFC under the same standards as imposing a $3.00 or lower PFC and provides a streamlined process for imposing PFC’s at small and medium hubs.  The bill does stabilize funding for the Airport Improvement Program (AIP) and, in fact, increases authorization for the program from $3.350 billion in fiscal year 2016 to $3.817 in fiscal year 2022. 

In terms of drones, the AIRR Act includes provisions that could force the FAA to provide exemptions for beyond-line-of-sight commercial drone flights.  In comments provided in April, AGC encouraged the FAA to eliminate requirements that aircrafts remain visible to its operator, provided that it remains visible to an observer working with the operator. The use of drones promises to improve the performance of the construction industry, including the many potential impacts on project planning and design, quality and productivity, compliance with environment and other rules, the resolution of disputes, and on the safety of construction workers. 

The AIRR Act is the first step in the reauthorization process. It is unclear at this point whether or not a reauthorization bill can move through the House and Senate prior to the March 31 expiration of the current extension.  AGC will continue to work to ensure that the best interests of the construction industry are represented as the bill moves through the legislative process.

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

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TAX
Tax Committee Hearing Emphasizes Need for Tax Changes
 

On Tuesday, the House Ways and Means Committee convened the panel’s first hearing of the year, which focused on “pro-growth policies” and views expressed by thought leaders in DC-based think tanks. Chairman Kevin Brady (R-Texas) noted his panel will be drafting international tax legislation over the next few months to address corporate inversions. Chairman Brady added that a timeline and details have not yet been decided, and that drafting will begin in the Tax Policy subcommittee led by Rep. Charles Boustany (R-La.).

Discussions on an international tax bill have heated up in recent weeks as attention-grabbing corporate inversions dominate national headlines. Rep. Tom Reed (R-NY) mentioned that any changes in the code addressing the tax treatment for C-corporations, should also include efforts to lower the tax burden on the pass-through businesses. Despite talk by Speaker Paul Ryan (R-Wisc.) and other members of Congress about broad-based reform efforts, Chairman Brady said the committee will target international issues, and acknowledged that even those changes were unlikely to reach the president’s desk in 2016.

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

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AGC EVENTS
AGC 97th Annual Convention Preview
There is Still Time to Register!
 

AGC’s 97th Annual Convention will be held March 9-11, 2016 in San Antonio, Texas. Please visit meetings.agc.org/convention for registration information. Below is a preview of the Utility Infrastructure, Federal & Heavy Construction, and Highway & Transportation Division meetings.

Utility Infrastructure Contractors Division

At the Utility Infrastructure Contractors Division Meeting on March 9 from 3:00-4:30 pm, come see a panel discussion profiling the Integrated Pipeline Project (IPL), a joint effort of Dallas Water and the Tarrant Regional Water District. Hear about the challenging needs of the region and the IPL’s unique approach to the solution, how the local chapter campaigned for and secured broad new funding access, and what it was like to be a contractor on this impressive project. We will also hear about solid strategies for improving diversity in your construction business from a younger member of the construction community. The Division is also hosting a forum on Delivering Tomorrow’s Electricity Infrastructure, designed to examine how challenges like moving to a lower carbon emissions environment, changing relationships between consumers and suppliers, the rise of outcomes-based regulation, increasing levels of distributed generation, and much more, rewrite the rulebook for how we think about electricity infrastructure. The Forum will take place on March 10 from 8:30-9:30 am and will explore and discuss how disruptive technology trends like cloud computing, reality capture, crowd funding, 3D printing, and more, are poised to transform the way in which electricity infrastructure is planned, financed, designed and made.

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

Federal & Heavy Construction Division

On Wednesday, March 9 from 10:30 am to noon, the AGC Federal & Heavy Construction Division will welcome presentations from the U.S. Army Corps of Engineers (invited) and Maura Hesdon, a young construction executive with Shoemaker Construction based in Pennsylvania. The Army Corps will provide an update of fiscal year 2016/17 projects and other updates on its multi-billion dollar construction program. Ms. Hesdon will discuss local, state and federal minority and women hiring goals for construction contracts and innovative ways as to how contractors can recruit workers to meet those goals.

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

Highway and Transportation Division

Rep. Kevin Brady (R-Tx), Chairman of the House Ways and Means Committee (mentioned in the story above), will address the Highway and Transportation Division on March 11, 2016. The Ways and Means Committee is the tax writing body in the House and has jurisdiction over revenue issues, including the Highway, Aviation, Inland Waterways and Harbor Maintenance (and potentially Water Infrastructure) Trust Funds. Chairman Brady will be discussing his ideas about how to fix the pending trust fund revenue shortage. He will also give his outlook for comprehensive tax reform in this session of Congress.

Also at the H&T Division meeting a Construction Leadership Council member will discuss the need for new managers in transportation construction companies to recognize the need to also be politically active at both the state and federal level. Brian Lee, Lane Construction, will point out that political activism should be part of the job description of any business that work in the public sector as support is needed to ensure a robust public market exists.

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

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Federal Contractors Conference Early-Bird Rate Extended to 2/12
Save $75 on Registration Fee; Held May 9-11 in DC
 

Register on or before February 12 for the 2016 AGC Federal Contractors Conference (FEDCON) and save $75 off the registration fee. FEDCON—held May 10-11 at the Mayflower Hotel in Washington, D.C.—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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