Construction Legislative Week in Review
www.agc.org November 16, 2017
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On the Inside
TAX/ACCOUNTING
Tax Reform Considered in Senate Finance Committee, Advances in House
WebEd: How Tax Reform May Impact YOUR Construction Business/Market
Register for AGC’s Financial Issues Winter Meeting
TRANSPORTATION
TCC Continues to Push HTF Fix in Tax Reform
REGULATIONS
AGC Targets Burdensome OSHA, PLA and DOJ Guidance
FEDERAL CONTRACTING
AGC Succeeds in Removing Blacklisting Provision from Annual Defense Bill
AGC SURVEY
AGC and Sage Begin Surveying Members for Annual Outlook
TAX/ACCOUNTING
Tax Reform Considered in Senate Finance Committee, Advances in House
Tell Your Representative/Senators to Provide Tax Relief for Construction
 

Earlier today the House passed its tax reform legislation, H.R. 1, the Tax Cuts and Jobs Act, by a vote of 227-205.  While there are a number of positives in the bill, such as repealing the estate tax, repealing the Alternative Minimum Tax, (AMT), and increasing the exemption from percentage of completion accounting to $25 million, AGC continues to have concerns about the taxation of pass-throughs and the lack of infrastructure financing in the bill.  AGC is continuing to communicate with the members of the House and Senate to make improvements in the legislation throughout the legislative process and urges you to contact your members of Congress and urge them to treat S-corps fairly as compared to C-corps and maintain incentives for public and private construction in tax reform.

On Nov. 9, the Senate Finance Committee released the Senate’s version of comprehensive tax reform, and, since then, its legislation has been significantly amended.  The Senate tax reform plan differs from the House’s in a number of meaningful ways, and AGC has put together a chart comparing the two bills.

For the construction industry, the biggest change is how the Senate bill approaches the taxation of pass-through entities (S-Corporations, LLC’s, Partnerships and Sole Proprietorships).  While the House bill creates a separate pass-through business tax rate, and sets up enforcement rules to curb abuses, the Senate bill would instead allow for a 17.4 percent deduction of net business income against the individual tax rates with a number of limitations.  The top effective tax rates for pass-throughs under both bills, however, would create a wide gap between the tax rate on C-Corporations and pass-throughs (roughly 35 percent and 32 percent in the House and Senate bills, versus 20 percent for C-Corporations).

Another important difference is that, after the Senate amended its legislation on Nov. 14, all of the individual tax provisions, including the rate relief for pass-through businesses, are now scheduled to expire after 2025.  Unfortunately, this change was made to accommodate the Senate budget rules, which do not allow for an increase in the deficit after 10 years.

Regarding infrastructure, the Senate bill did not entirely repeal the tax exemption for Private Activity Bonds (PABs) as the House bill did, and scaled back the Historic Tax Credit, rather than repealing it entirely as House bill did.  These are improvements compared to the House bill.

  

For more information, contact Matthew Turkstra at matthew.turkstra@agc.org or (202) 547-4733. Return to Top

WebEd: How Tax Reform May Impact YOUR Construction Business/Market
Nov. 20, 2017 from 2:00 PM to 3:30 PM ET
 

Register today for this complementary webinar for AGC members. As you know, the most far-reaching tax reform legislation since 1986 is speeding through Congress. No matter what your construction market—public or private—or construction firm—c-corporation, s-corporation, LLC, LLP, or partnership—the passage of this legislation will have an impact on you.

During this webinar, AGC’s lead infrastructure and tax lobbyists on Capitol Hill—Sean O’Neill and Matt Turkstra— and Chief Economist Ken Simonson will discuss:

  • The latest updates on what’s in and what’s out of the tax reform legislation;
  • The likelihood of its becoming law and, if so, when it would take effect;
  • What this could mean for your construction business—no matter the type, c-corp, s-corp, LLC, partnership or so forth;
  • What this could mean for your construction marketplace—public or private; and
  • How AGC is advocating for your business and what you can do to help shape this critical legislation.

For more information, contact Matthew Turkstra at matthew.turkstra@agc.org or (202) 547-4733.  Return to Top

Register for AGC’s Financial Issues Winter Meeting
Early Bird Registration Ends November 20, 2017
 

The AGC Financial Issues Committee (FIC) Summer Meeting will be held January 8-9 at the Kimpton Solamar in San Diego, CA. Visit the meeting site to register and book your stay!

The Committee is geared toward member company CFOs, Controllers, Tax Directors, Sureties 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. Meetings center around discussions with FASB, practitioners, and financial officer breakout groups on topics including internal controls, project performance reviews and cybersecurity solutions. Attendees also have an opportunity to network and discuss a wide variety of topics, including: audit issues faced by construction companies; Executive & Congressional action on federal tax policy; and best practices for industry professionals.

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

TRANSPORTATION
TCC Continues to Push HTF Fix in Tax Reform
Contact your Congressional Delegation Today
 

Neither the version of tax reform legislation approved by the House today nor the Senate version currently under consideration in the Senate Finance Committee currently contain provisions to fix the Highway Trust Fund’s revenue shortfall. Nevertheless, AGC and the Transportation Construction Coalition (TCC) continues to press both houses of Congress to use tax reform as an opportunity to address the trust fund’s solvency. TCC sent a letter today to Senate Finance Committee members highlighting this concern and urging action. The letter mirrors one previously sent to the House Ways & Means Committee.Contact your members of Congress and ask them to push for inclusion of a Highway Trust Fund revenue solution as the process moves forward. 

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

REGULATIONS
AGC Targets Burdensome OSHA, PLA and DOJ Guidance
Calls for Congressional Repeal These Agency Policies
 

On November 15, AGC urged Congress to repeal—under the Congressional Review Act (CRA)—burdensome federal agency policies, including the U.S. Occupational Health and Safety Administration’s (OSHA) multi-employer citation policy, the U.S. General Services Administration’s (GSA) bid preference policy for construction project proposals including project labor agreements (PLAs), and the U.S. Department of Justice’s (DOJ) guidance seeking to hold individuals in construction firms criminally liable for company offenses. A recent decision by the U.S. Government Accountability Office (GAO) confirmed what AGC informed Congress of last November: that Congress may repeal not only final rules under the CRA, but also agency guidance and policies. 

Collectively, these policies place unnecessary and unreasonable risks on contractors, often driving up the cost of construction. The OSHA multi-employer citation policy has created a confounding web of risk for prime contractors, often considered controlling employers responsible for the miscues of other contractors on the jobsite. GSA is the only federal construction agency that provides a 10 point bid preference for proposals with PLAs. And, the DOJ policy encourages prosecutorial fishing expeditions, instead of calculated enforcement efforts to address the actions of bad actors.

AGC has previously encouraged the administration to address these policies and will continue to work with both Congress and the agencies to repeal them.

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

FEDERAL CONTRACTING
AGC Succeeds in Removing Blacklisting Provision from Annual Defense Bill
 

A compromised version the National Defense Authorization Act for Fiscal Year 2018 (NDAA)—which would authorize nearly $700 billion for the Department of Defense (DOD)—is expected to pass Congress and be signed into law after the Thanksgiving holiday. The NDAA contains a host of AGC-backed federal construction procurement provisions important to construction contractors.  Most importantly, however, is the fact that a federal contractor blacklisting provision is not in the final NDAA bill, thanks to AGC and industry coalition advocacy efforts.

As wenoted previously, the Senate version of the bill originally contained a section that would essentially resurrect the Fair Pay and Safe Workplaces (Blacklisting) Executive Order.  AGC met with Senate offices and have worked with the Blacklisting Coalition to voice the concerns of industry.  The compromised defense bill removes that provision.  AGC will continue to monitor this study and advocate for the exclusion of any further blacklisting rules. 

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

AGC SURVEY
AGC and Sage Begin Surveying Members for Annual Outlook
Help Us Generate a Comprehensive Outlook for 2018 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: 2018 Construction Industry Hiring and Business Outlook

For more information, contact Nahee Rosso at rosson@agc.org or (703) 837-5348. Return to Top

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