Construction Legislative Week in Review
www.agc.org May 31, 2018
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On the Inside
TRADE
Trump Administration Expands Steel & Aluminum Tariffs
Trump Administration Announces 25% Tariffs on Chinese Goods
TRANSPORTATION
FHWA Repeals Greenhouse Gas Performance Measures
IMMIGRATION
ICE Workplace Inspections on the Rise; Is Your Company Prepared?
TAX/ACCOUNTING
IRS Issues Warning to States Enacting Workarounds for State and Local Tax Cap
2018 Summer Financial Issues Committee Meeting
SAFETY
2018 AGC Summer Safety & Health Conference
Advanced Safety Management Training Course
ENVIRONMENT
Look What’s on the Agenda for AGC’s 2018 Construction Environmental Conference
TRADE
Trump Administration Expands Steel & Aluminum Tariffs
AGC Provides Tariff Resources for Construction Contractors
 

On May 31, U.S. Department of Commerce Secretary Wilbur Rossannounced steel and aluminum tariffs for Canada, Mexico and the European Union effective June 1. These countries were previously spared from the March 23-imposed 25 percent tariff on steel and 10 percent tariff on aluminum. According to reports, at least 30 percent of imported steel came from these nations in 2017. As a result, contractors may expect further increases in domestic steel prices and mill delivery delays. AGC has put together several resources for construction contractors regarding the various trade actions affecting construction, including a primer on tariffs in effect or under consideration, and contractual considerations privateand federal/federal-aid contractors should consider in light of the tariffs.

Construction contractors are encouraged to contact the president and their congressional elected officials to let them know how these tariffs impact their construction markets.  AGC continues to educate the White House and Congress on the impacts these and other potential tariff actions are having on the construction industry.

For more information, contact Jimmy Christianson at christiansonj@agc.org Return to Top

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Trump Administration Announces 25% Tariffs on Chinese Goods
Construction Equipment, Products and Materials Could be Included
 

On May 29, the White House announced its intent to impose 25 percent tariffs on $50 billion worth of imported Chinese goods, some of which could include construction equipment, products and materials (e.g., concrete or mortar mixers; electric signaling items for traffic or safety control; elevators and conveyors; tower cranes; tunneling machinery; water pumps, etc.). AGC previously urged the administration to remove construction-related goods from the proposed tariff list, as they do not appear to meet the intended purpose of the tariffs: retaliation for China’s state-directed intellectual property theft.  The final list of Chinese goods subject to the tariffs is expected by June 15, with the tariffs set for imposition shortly thereafter.

For more information, contact Jimmy Christianson at christiansonj@agc.org Return to Top

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TRANSPORTATION
FHWA Repeals Greenhouse Gas Performance Measures
AGC Fights Back Against Obama-Era Rule that Would Have Slowed Project Approval
 

On May 22, the Federal Highway Administration (FHWA) repealed a regulation put in place in the waning days of the Obama administration that would have required states to measure greenhouse gas (GHG) emissions on highways as part of the planning process for transportation improvement projects. AGC was actively involved in fighting this rule from its inception, raising concerns about its legality and application in a 14-page comment letter. AGC also joined with 38 other organizations in challenging FHWA’s authority to mandate the measurements.  And, AGC submitted a second round of comments to Transportation Secretary Chao last November. AGC’s comments were cited multiple times in the final repeal notice. 

AGC’s comments argued that the rule undermines the transportation planning process, could adversely impact air quality and duplicates other federal initiatives related to GHG already underway.  AGC also raised the issue in a meeting with Transportation Secretary Chao in her first days on the job following Senate confirmation.

For more background on this issue, please see prior AGC articles here and here.  If you have additional questions, contact Brian Deery at deeryb@agc.org or (703) 837-5319 Return to Top

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IMMIGRATION
ICE Workplace Inspections on the Rise; Is Your Company Prepared?
Register Now for Form I-9 and E-Verify Two-Part WebEd Series
 

U.S. Immigration and Customs Enforcement (ICE) has ramped up workplace inspections, increasing audits and arrests as part of an effort to find illegal workers and deter businesses from hiring them.  According to recently released data, ongoing worksite cases have already doubled in fiscal year 2018 in comparison to last year.  In light of these developments, don’t miss out on this valuable AGC WebEd series and learn how to stay a step ahead of a potential audit.

From Oct. 1, 2017, through May 4, the agency’s Homeland Security Investigations (HSI) opened 3,510 worksite investigations; initiated 2,282 I-9 audits; and made 594 criminal and 610 administrative worksite-related arrests, respectively. In comparison, for fiscal year 2017 – running October 2016 to September 2017 – HSI opened 1,716 worksite investigations; initiated 1,360 I-9 audits; and made 139 criminal arrests and 172 administrative arrests related to worksite enforcement. Derek Benner, the Acting Executive Associate Director for ICE’s Homeland Security Investigation division, has indicated ICE would like to open 15,000 audits per year if possible.

As for penalties, ICE calculates them by dividing the number of violations by the total number of employees to reach a “violation percentage”. The penalties, which range from $220 to $2,191 per violation, go up depending on whether it’s a first, second, or third offense. A recent agency fact sheet makes it appear that violation percentages are calculated separately depending on whether you’re talking about an I-9 violation--such as failing to properly complete a section of the form--or to knowingly hiring and/or continuing to employ an unauthorized immigrant. But in practice, it is being reported that ICE is combining the two types of offenses to reach a higher percentage and impose a higher fine.

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

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TAX/ACCOUNTING
IRS Issues Warning to States Enacting Workarounds for State and Local Tax Cap
 

The recently enacted tax reform law established a new $10,000 cap on the amount of state and local taxes that taxpayers can deduct on their federal taxes.  Previously, taxpayers could deduct the full amounts owed in personal property taxes, and state and local income taxes on their federal tax return. However, taxpayers subject to the Alternative Minimum Tax (AMT) could not deduct these taxes at all.

Since the passage of the bill, a number of states—most prominently New York, New Jersey, and Connecticut—have taken aggressive steps to create “workarounds” for the new $10,000 cap.  While each state’s proposals are different, a common element is to allow taxpayers to make payments to specified state-controlled entities as a charitable contribution (which are still fully deductible) in exchange for a state tax credit against state and local taxes owed.

Last week, the Internal Revenue Service (IRS) issued a notice that they will, “in the near future,” issue guidelines “addressing the federal income tax treatment of certain payments made by taxpayers for which taxpayers receive a credit against their state and local taxes.”  The notice further noted that “despite these state efforts to circumvent the new statutory limitation on state and local tax deductions, taxpayers should be mindful that federal law controls the proper characterization of payments for federal income tax purposes.”

In response, Ways and Means Committee Chairman Kevin Brady applauded the IRS for “responding to these gimmicks,” while the Governor of New Jersey, Phil Murphy, said “I remain committed to fighting the state and local tax deduction tax cap and am confident that the solution signed into law can and should be embraced by the IRS. Anything less is a flat-out admittance that politics rather than policy guides the decisions of the Trump administration.”

Legal analysts remain divided in their opinions about the legality of the workaround.  Some believe that, regardless of any IRS regulations, what some states have proposed will hold up in court.  However, many others dispute this, noting that the workaround will likely be found to be illegal.  If this is the case, taxpayers could on the hook for both their payments to the state government, and a higher than expected federal tax bill.  AGC of America is monitoring the action at the federal level, and will update members with any action taken by the IRS.

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

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2018 Summer Financial Issues Committee Meeting
 

Next week – on June 7-8 – the Financial Issues Committee will meet in Washington, D.C.  This year, the Committee will hear updates on the Tax Cuts and Jobs Act from Senator Steve Daines, S-Corporation Association President Brian Reardon, and an update on the new Opportunity Zones from tax counsel to Senator Tim Scott, Shafron Hawkins.  Additionally, attendees will hear updates on the latest from the Financial Accounting Standards Board (FASB) and new accounting initiatives. Full details on the Conference can be found hereReturn to Top

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SAFETY
2018 AGC Summer Safety & Health Conference
July 25-27 in Indianapolis, IN
 

The 2018 Summer Safety & Health Conference will take place July 25-27, 2018 at the JW Marriott in Indianapolis, IN. Join more than 250 industry professionals and participate in the development of regulatory and legislative activity on both a national and local level; assist in the development and creation of new safety training programs and products; and hear the latest initiatives from OSHA and other industry experts. Full details on the Conference and links to registration and the hotel room block can be found hereReturn to Top

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Advanced Safety Management Training Course
October 17-19 in Arlington, VA
 

This unique three–day course provides construction safety and health professionals with the next–level knowledge required to successfully manage a company–wide safety program. Moving beyond the basics of Focus Four training, AGC’s Advanced Safety Management Training Program will give participants a more holistic view of safety’s role in project and company success, as well as advanced tactics and best practices for managing all aspects of a corporate safety program. Participants will also focus on the importance of "selling" safety throughout the organization and methods to generate buy–in from different audiences. Full details on the course and links to registration can be found here. Return to Top

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ENVIRONMENT
Look What’s on the Agenda for AGC’s 2018 Construction Environmental Conference
 

Are you ready for engaging discussions and educational sessions at this year’s environmental conference?  The agenda is posted and registration is open; reserve your seat today for AGC’s 2018 Construction Environmental Conference at the DoubleTree by Hilton in Crystal City, Virginia, on Sept. 12-13.

Whether your goal is an excellent compliance record, to keep abreast of key developments and trends, or to gain an understanding of how environmental issues affect your job responsibilities and projects – AGC’s CEC is the conference for you.  Look what’s on the agenda for 2018.

  • Manage environmental requirements and risk: Learn the latest developments in water, waste, hazardous materials and contaminants, emergency reporting and response, and species considerations.
  • Factor environmental concerns into phases of a project: Discuss wildlife and community solutions during the planning process and operations, permitting issues on large and small projects, properly insuring your projects, and avoiding common mistakes (and enforcement actions!) during operations.
  • Expand your knowledge and skills: Explore training and technology tools, materials and life-cycle analysis, as well as the growing prefab trend.

For conference information and registration, go to http://meetings.agc.org/cec/ or contact Melinda Tomaino at tomainom@agc.org Return to Top

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