Construction Legislative Week in Review
www.agc.org August 23, 2018
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On the Inside
AGC AT WORK
AGC Construction Advocacy Fund Invests in two State Infrastructure Funding Campaigns
TAX REFORM
Error in Tax Reform Law Jeopardizes Certain Building Renovation Projects
ENVIRONMENT
Issuance of New 404 Permits or Jurisdictional Determinations on Hold
White House to Update National Environmental Policy Act Regulations
EPA Proposes to Lower Dust-Lead Hazard Standards; Would Leave Definition of Lead Paint Unchanged
WOTUS and Three More Compelling Reasons to Attend AGC’s Construction Environmental Conference
TRANSPORTATION
FMCSA Seeks Comment on Hours of Service Rule Changes
FEDERAL CONTRACTING
FAR Council Adopts Federal Contractor Paid Leave Interim Rule without Change
AGC Trains VA Resident Engineers on Partnering, Bidding, and More
SAFETY
Advanced Safety Management Training Course
AGC AT WORK
AGC Construction Advocacy Fund Invests in two State Infrastructure Funding Campaigns
Outcome of Ballot Measures Will Have National Significance for the Industry
 

AGC's Construction Advocacy Fund is providing significant financial resources to support construction market growth efforts involving two state ballot initiatives that have national significance for the industry. Those efforts include: (1) providing $250,000 to oppose a California ballot initiative to cut $54 billion in construction funding by repealing a recent fuel tax increase—representing the first state ballot initiative seeking to significantly slash construction funding; and (2) delivering $75,000 to support a Colorado ballot initiative increasing a state sales tax and dedicating the proceeds to construction project investments. A portion of the contribution to the Colorado initiative will generate a new economic model that will help demonstrate the positive impact of increased infrastructure investments for each state in the country. Please visit constructionadvocacyfund.agc.org  to learn more about the Fund and how it fights for your construction livelihood, business and market.  Return to Top

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TAX REFORM
Error in Tax Reform Law Jeopardizes Certain Building Renovation Projects
AGC Calls for Regulatory/Legislative Fix
 

A drafting error in the new tax reform law—referred to as the “retail glitch”—causes interior construction renovations to retail stores, restaurants and leaseholds to be written off over 39 years instead of one year, as intended by Congress. In the absence of this new business investment deduction known as Qualified Improvement Property (QIP), some businesses are delaying and even canceling capital improvements such as flooring, lighting, sprinkler systems, or other types of remodeling and interior improvements to these types of nonresidential buildings. Without a legislative fix to date, AGC–along with business organization allies—urgedthe U.S. Treasury Department to fix this error by issuing new guidance based on Congress’s intent.

Prior to passage of the new tax reform law, the tax code allowed for the depreciation of such restaurant, retail, and leasehold improvements over 15 years, while most building improvements are generally depreciable over 39 years.  The Act combined the three categories into a new category—QIP—and intended to allow for one-year 100 percent bonus depreciation, enabling businesses to immediately deduct the cost of these building improvements.

While AGC continues to push Congress to pass a technical corrections bill that would correct this error, resistance from many legislators to passing a corrections bill makes that outcome unclear in the short term.  It is also unclear at this point if Treasury can follow Congressional intent (rather than the statute as written).  AGC will continue to monitor this situation closely.

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

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ENVIRONMENT
Issuance of New 404 Permits or Jurisdictional Determinations on Hold
Court Ruling Puts 2015 WOTUS Rule in Effect in 26 States
 

As a result of an August 16 federal court ruling, U.S. Army Corps of Engineers has put a hold on the issuance of any new federal Clean Water Act Section 404 permits or jurisdictional determinations for at least the next two weeks as the agency develops guidance to address the court’s findings. The court ruling put in effect in 26 states (see below) the Obama administration’s 2015 “Waters of the United States” (WOTUS) rule—which redefines federal environmental permitting jurisdiction under the Clean Water Act. Existing approved 404 permits and jurisdictional determinations for projects should remain valid; but experts still urge caution against citizen suits. AGC published an in-depth look at the 2015 WOTUS rule when it was finalized.  

The 2015 WOTUS rule is now in effect in:  California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, and Washington. 

This is a developing issue and the situation could change quickly.  Multiple cases challenging the 2015 rule are working their way through the district courts.  Three courts have already determined that challenges to the 2015 rule are likely to succeed on their merits. Already, groups have moved to appeal the August 16 decision, as well as urge a Texas-based court to promptly issue a nationwide injunction against the 2015 rule.  AGC will continue to closely track this issue and report to members.

For more information, contact Melinda Tomaino at tomainom@agc.org or (703) 837-5415. Return to Top

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White House to Update National Environmental Policy Act Regulations
AGC Supplies Recommendations to Streamline NEPA Procedures
 

The White House Council on Environmental Quality (CEQ) recently requested feedback on ways to update its regulations that implement the National Environmental Policy Act (NEPA), which can be a circuitous, time-intensive, and costly environmental review step for many infrastructure projects. Given the broad range of actions covered by NEPA – including federal funding, federal permit applications, federal land management decisions – AGC has been highly focused on ways to improve the approval process.  Building on its prior extensive recommendations to the federal agencies, Congress, and the current administration; AGC’s August 20th letter to CEQ recommends several key areas for improvement. 

AGC urged CEQ to update its NEPA regulations to bring clarity and consistency across agencies on currently ambiguous provisions that seem to invite legal action and delay infrastructure projects.  With this in mind, AGC recommends that CEQ: set a limit on the range of project alternatives to evaluate, determine which types of project changes would prompt a re-evaluation of the NEPA documentation, set an appropriate “shelf-life” for that documentation, identify parameters for “how much is enough” when evaluating potential impacts, and introduce more flexibility into the mitigation process.

For more information, contact Leah Pilconis at pilconisl@agc.org or (703) 837-5332.  Return to Top

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EPA Proposes to Lower Dust-Lead Hazard Standards; Would Leave Definition of Lead Paint Unchanged
AGC Supports Agency Move Towards Greater Transparency in Regulatory Science
 

The U.S. Environmental Protection Agency (EPA) is proposing to lower the dust-lead hazard standard on floors and window sills (from 40 μg/ft2 and 250 μg/ft2 to 10 μg/ft2 and 100 μg/ft2, respectively).  At the same time, EPA proposed no changes to the current definition of lead-based paint, and indicated that the standard would not apply to future “clearance testing” efforts, citing insufficient information to warrant such changes.  In an August 16 comment letter, AGC agreed that EPA currently lacks sufficient data to change the existing lead-based paint definition or the post-abatement dust clearance levels.  

AGC’s letter points out that EPA appropriately recognized that more data and information is needed on whether current EPA-recognized laboratories and portable field technologies can reliably measure dust samples at those lower levels.  AGC supports EPA’s approach to acknowledging data gaps and the resultant impacts on agency decision-making, which is in keeping with EPA’s broader effort to improve the transparency and integrity of the scientific data. The proposed standards would apply to EPA’s lead abatement and related programs that cover target housing (i.e., most pre-1978 housing) and pre-1978 child occupied facilities.  Apart from child occupied facilities, no other public and commercial buildings are covered by EPA’s lead paint program.

For more information, contact Leah Pilconis at pilconisl@agc.org or (703) 837-5332.  Return to Top

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WOTUS and Three More Compelling Reasons to Attend AGC’s Construction Environmental Conference
Reserve your Hotel Room by August 25
 

Recent changes related to the 2015 Waters of the United States (WOTUS) rule reminds us that the regulatory landscape can change quickly.  AGC’s 2018 Construction Environmental Conference is right around the corner on September 12-13 in Crystal City, Virginia, and brings together federal agency staff, industry experts, and contractors from across the county.  It is a “don’t miss” opportunity to get up to speed on WOTUS/404 permitting issues.  More than that, the CEC agenda is jam-packed with regulatory and environmental risk issues important to the business of construction.  Below are three compelling reasons to attend.  Register today! 

  1. Compliance Excellence: Learn how to manage environmental requirements with information straight from federal regulatory agencies and industry experts covering: stormwater, groundwater, species, Clean Water Act section 404 permitting and WOTUS, aerosol cans, lead-based paint, hazardous materials, and the Emergency Planning and Community Right-to-Know Act.
  2. Risk Management: Discuss ways to identify, avoid, mitigate, and insure environmental risk; Learn about how to manage hazardous materials and redevelopment opportunities and risk; Hear from the U.S. Environmental Protection Agency, an attorney, and a general contractor about “true story” enforcement cases and best practices on how to avoid them, as well as, EPA’s Audit Policy and eDisclosure tools.
  3. Peer-to-Peer Learning: Hear from your peers in the construction industry on the agenda, as well as, during networking opportunities. *General contractor attendees can also sign up for an optional “add-on” session of peer-led roundtable discussions co-located with the conference and held the day before.  See the pre-meeting page for more details.*

Act now: The deadline for reserving accommodations at the AGC room rate at the Doubletree by Hilton is August 25!

For more information, contact Melinda Tomaino at tomainom@agc.org or (703) 837-5415. Return to Top

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TRANSPORTATION
FMCSA Seeks Comment on Hours of Service Rule Changes
Impacted AGC Members Should Comment
 

The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) announced that it is seeking public comment on revising four specific areas of the current hours-of-service (HOS) regulations. These four main areas under consideration for revision are: (1) expanding the current 100 air-mile “short-haul” exemption from 12 hours on duty to 14 hours on duty to bring consistency to the rules for long-haul truck drivers, (2) extending the current 14-hour on-duty limitation by up to two hours when a truck driver encounters adverse driving conditions, (3) revising the current mandatory 30-minute break for truck drivers after eight hours of continuous driving and (4) reinstating the option for splitting up the required 10-hour off-duty rest break for drivers operating trucks that are equipped with a sleeper-berth compartment. AGC will be submitting comments in support of these revisions and requesting additional changes.

Individual members are also encouraged to submit comments by the September 24, 2018 deadline. For further details please review the proposal.

AGC maintains that construction industry truck drivers were never intended to be covered by FMCSA’s hours of service (HOS) restrictions, which were originally aimed at long-haul cross-country drivers. However, many construction drivers are impacted and the problem has become more pronounced because of the recent requirement that drivers must use Electronic Logging Devices (ELDs) to record their on-duty times. While a variety of exemptions have been granted to segments of the construction industry – such as asphalt and ready mix delivery and certain trucks used in paving operations – these are limited and cause confusion.

AGC is also working in support of the HOURS Act that would expand the logging exemption for short-haul drivers from 100 to 150 miles, expand the on-duty time to 14 hours and eliminate the 30-minute rest requirement. Certain paperwork requirements would also be eased and the Federal Motor Carrier Administration would be encouraged to move expeditiously to finalize a rule on the use of sleeper berth to meet off duty provisions. AGC is urging members to contact their Congressional representatives through AGC’s Legislative Action Center. 

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

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FEDERAL CONTRACTING
FAR Council Adopts Federal Contractor Paid Leave Interim Rule without Change
Administration Finalizes the Requirement, Extinguishing Hope of Repeal/Improvement
 

The Federal Acquisition Regulatory (FAR) Council on August 22 issued a final rule adopting a December 2016 interim rule that implements former-Pres. Obama’s Establishing Paid Sick Leave for Federal Contractors executive order and the related September 2016 final rule issued by the U.S. Department of Labor (DOL).  

The new rule, which takes effect immediately, adopts the interim rule without any change and contains the same employer mandates as the DOL rule.  Accordingly, contractors need not alter their policies or practices in response to this latest action, provided that they are in compliance with existing regulations and federal contracts.  The action does send a signal, however, to those still holding out hope that the Trump Administration might rescind the executive order and related regulations:  chances are extremely slim.

The adopted interim rule requires federal contract solicitations issued on or after January 1, 2017, and resultant contracts to include a new FAR Clause 52.222-62 incorporating paid leave mandates.  It applies to all federal contracts and subcontracts at all tiers that will be performed within the U.S.

It does not apply to contracts with state government agencies even if the contracts are federally funded.  (AGC has found that some state departments of transportation have erroneously incorporated the mandates into contracts for federally assisted highway projects.  Contractors facing this situation may contact AGC for assistance.)

The following resources offer further guidance on paid leave mandates for federal contractors:

For more information, contact Denise Gold at goldd@agc.org or Claiborne Guy at claiborne.guy@agc.org. Return to Top

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AGC Trains VA Resident Engineers on Partnering, Bidding, and More
 

Last week, AGC members met with the Department of Veteran Affairs (VA) resident engineers from across the country for an interactive training session at the VA Acquisition Academy in Frederick, Md. AGC members explained the importance of early communication by VA, gave incites on the type of information that industry seeks in order to qualify an opportunity, and the value associated with certain types of VA engagements (e.g. RFIs, one-on-ones, partnering, industry days). AGC members spoke about how different factors might influence the decision towards either bidding or not bidding (e.g., costs of competition, risks, acquisition strategy, past acquisition practices of customer, competitive analysis, etc.).  VA resident engineers engaged in team exercises where they would brainstorm on the timelines of the different steps involved.  

AGC frequently engages in training sessions with federal agencies and remains dedicated to further educating federal agencies on construction process.

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

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SAFETY
Advanced Safety Management Training Course
October 17-19 in Arlington, VA, 10 Seats Left!
 

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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