Construction Legislative Week in Review
www.agc.org July 27, 2017
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On the Inside
TAX REFORM
"Big 6" Release Statement on Tax Reform
INFRASTRUCTURE
Senate Committee Moves Transportation Funding Bill
LABOR
Labor Department Requests Input on Revising Overtime Rule
LABOR
AGC Calls on GSA to Withdraw PLA Preference Policy
TRANSPORTATION
AGC Recommends U.S. DOT Regulatory Reforms
APPROPRIATIONS
House Votes on Four Appropriations Bills
SURVEY
Please Take AGC’s Workforce Survey
TAX REFORM
"Big 6" Release Statement on Tax Reform
 

Over the past couple of months, a group of six leaders from Congress and the Trump Administration have met regularly to develop a "unified proposal". Dubbed the "Big 6," this group is comprised of House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Secretary of the Treasury Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX).  Previously, the House of Representatives developed a proposal called the "Better Way Agenda" for taxes, but certain components of the House proposal were not supported by the Senate or the Administration.  

In a statement released on Thursday at 2:00PM, the "Big 6" said that they agreed in principle to a template for tax reform, and that the tax reform process would proceed in September, with Ways and Means and Senate Finance taking the lead in drafting legislation.  

While short on the specifics of policy, there were a few takeaways from the statement: 1) the group acknowledges that tax reform needs to be comprehensive, and needs to lower the tax rates of both Corporations and pass-through entities (and individuals) 2) the group is dropping the controversial border-adjustment tax proposal previously outlined in the House blueprint 3) the group is placing a higher priority on tax rate reduction and permanence, which will likely mean that the proposal will need to be revenue-neutral within the budget window.  

The policies outlined in the statement are in line with AGC's tax priorities as submitted in various forums over the past 5 years.  We will continue to monitor the group's progress to ensure that tax reform leads to a positive outcome for the construction industry.

For more information, please contact Matthew Turkstra at matt.turkstra@agc.org or (202) 547-4733.

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INFRASTRUCTURE
Senate Committee Moves Transportation Funding Bill
Includes AGC Supported Airport Infrastructure Provisions
 

Today, the Senate Appropriations Committee moved the FY 2018 Transportation, Housing and Urban Development (THUD) funding bill out of their committee.  The bill is a significant victory for airport infrastructure, as it increases the maximum Passenger Facility Charge (PFC) that an airport can charge from $4.50 to $8.50 per passenger and increases funding for the Airport Improvement Program (AIP).  AGC joined our partners in the Transportation Construction Coalition (TCC) and the Beyond the Runway Coalition in advocating the PFC and AIP increases. 

The bill provides the full amount of funding for Highway Trust Fund programs as authorized in the FAST Act - $44.234 billion for highways and $9.733 billion for mass transit formula grants. Additionally, the bill provides $2.133 billion for the Federal Transit Administration’s (FTA) Capital Investment Grant program, which, according to the committee, will be enough to fund projects around the country awaiting a full funding grant agreement in 2017.  Finally, and unlike the House which zeroed out the TIGER program, the Senate bill restores the program to $550 million, a $50 million increase of 2017 levels. 

The next step for the bill will be consideration by the entire Senate and hopefully a conference with the House when they pass their THUD bill.  AGC will continue to work to ensure the final transportation appropriations includes the additional funding for airport infrastructure and continues to fund highway and transit programs at FAST Act levels. 

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

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LABOR
Labor Department Requests Input on Revising Overtime Rule
 

On July 26, the U.S. Department of Labor (DOL) formally published a Request for Information (RFI) on the 2016 changes to the Fair Labor Standards Act (FLSA) overtime regulations. In line with AGC’s regulatory recommendations, this RFI is the first step the DOL is undertaking to revisit the overtime rule, which dramatically increased the salary threshold for exempt employees. AGC and its members were concerned that imposing such a large and immediate increase might result in unintended consequences, particularly for small construction companies, construction employers in lower‐wage regions, and construction personnel.  

In 2016, the DOL released a final rule implementing changes to the overtime regulations.  The most significant change was a doubling of the standard salary threshold for exempt employees – from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).  The changes were set to take effect on Dec. 1, 2016, but a district court in Texas blocked the Obama administration's rule. In its decision, the court noted that DOL, by setting the salary threshold so high in the rule, improperly made it the primary focus in determining whether an employee is exempt. The Trump administration abandoned the Labor Department's initial appeal of the court striking down the salary threshold, but appealed the decision's conclusion that the DOL did not have the authority to set a salary threshold to determine whether an employee qualifies for exemption.  

Still awaiting the court’s decision, the DOL ultimately decided to go forward and seek public input on the rule now to assist in the development of a future notice of proposed rulemaking (NPRM).  Specifically, the RFI requests comments on questions related to the salary level test, the duties test, inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly compensated employees, and automatic updating of the salary level tests. The deadline to submit comments is September 25, 2017.  

AGC will continue to provide input to the DOL on the impact further changes might have on the construction industry and will notify members of any developments.   

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.

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LABOR
AGC Calls on GSA to Withdraw PLA Preference Policy
Also Recommends Change Order & Other Reforms
 

On July 24, AGC urged the U.S. General Services Administration (GSA) to rescind its project labor agreement (PLA) bid preference policy in the association’s detailed response to GSA’s request for regulatory reform. GSA is the only major federal construction agency to include such a bid preference in its procurement process. 

Additionally, given the problems GSA and other federal owners have with timely execution of change orders, AGC also recommended that the agency establish timelines—based on dollar thresholds—for contracting officers to follow on executing change orders. AGC also put forth language that would help prevent contracting officers from denying change order proposals based on insignificant paperwork mistakes, which can be used as a means to reset the clock.   

AGC also recommended that GSA—as a member of the Federal Acquisition Regulation Council—issue a rulemaking to put in place the counting of lower tier small business subcontractors and allow the agency to use CM-at-Risk in a way that more closely resembles private sector use of the procurement and project delivery method. 

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

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TRANSPORTATION
AGC Recommends U.S. DOT Regulatory Reforms
Covers DBE Program, Environmental Permitting & More
 

On July 24, AGC submitted more than 50 pages worth of regulatory reform recommendations to the U.S. Department of Transportation (U.S. DOT) upon the department’s request. In this comprehensive document, AGC put forth recommendations for improving the highway work zone safety, Federal Motor Carrier Safety Administration regulations, the Disadvantaged Business Enterprise Program, and the federal environmental review and permitting processes, among other things. AGC also recommended that U.S. DOT eliminate its local hire pilot program and rescind the outstanding proposed rule for such a program. 

This AGC submission comes on the heels of U.S. DOT putting forth its 2017 regulatory plan last week. As part of the semi-annual Unified Regulatory and Deregulatory Agenda, U.S. DOT revealed that it has not yet determined the next action on the Obama administration’s proposed regulation on local hiring requirements. In response, AGC was once again successful in pushing Congress to include a provision in annual spending legislation that—when signed into law—would restrict the use of local hire requirements on highway and transit projects that have federal funding. 

Additionally, the U.S. DOT terminated a highway work zone safety rulemaking—mandated by statute under MAP-21—that would have ensured that positive protection measures and temporary longitudinal traffic barriers would be used in work zones in certain situations. The department, however, did indicate its intent to follow through on a rulemaking to establish a pilot program authorizing five states to conduct environmental reviews and make approvals for projects under state environmental laws and regulations, rather than through the National Environmental Policy Act. 

For more information, contact Brian Deery at deeryb@agc.org or 703-837-5319. 

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APPROPRIATIONS
House Votes on Four Appropriations Bills
Leaves for August Recess, but Senate Remains
 

Before members of Congress leave for the August recess, House lawmakers are voting on H.R. 3219, the Make America Secure Appropriations Act. The bill includes funding provisions from four separate appropriations bills – Department of Defense, Legislative Branch, Military Construction/Veterans Affairs, and Energy and Water. Noteworthy provisions to AGC members include: $10.2 billion for roughly 220 military construction projects, $753 million for both the major and minor construction of VA facilities, $6.16 billion in funding for the U.S. Army Corps of Engineers, and $1.57 billion for the southern border wall. Passage of the bill is expected this week. AGC will continue to track the bill’s progress and will report further next week on all relevant provisions. 

While all twelve appropriations bills have cleared their respective subcommittees in the House, the Senate remains far behind schedule. The House will leave Washington, D.C. for the August recess and will return after Labor Day, while the Senate will remain in session for an additional two weeks. Funding for the federal government expires on September 30, 2017.  

For more information, contact Jordan Howard at Jordan.Howard@agc.org or (703) 837-5368.

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SURVEY
Please Take AGC’s Workforce Survey
The survey will close by the middle of August.
 

We continue to hear from many contractors that finding workers is difficult, so we are once again conducting a survey of construction labor market conditions. While it is clear that worker shortages are a significant problem for many contractors, we feel it is important to continue our efforts to better quantify where these shortages are taking place, how severe they are, and what steps firms are taking to both cope with tight labor markets and improve the supply of new, qualified workers. Please take a few minutes to complete the following workforce survey.  

The more people understand the scope, and consequences, of a tight construction labor market, the more likely they are to act on the measures we identify in our Workforce Development Plan that are designed to make it easier for school systems, local associations and private firms to establish career and technical education and training programs.  

 
For more information, contact Nahee Rosso at rosson@agc.org or 703-837-5348.

 

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