Construction Legislative Week in Review
www.agc.org March 14, 2019
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On the Inside
Workforce
AGC-Backed Construction Guest Worker Visa Bill Introduced
Infrastructure
House Panel Weights Path Forward on Infrastructure Legislation
FHWA Acting Administrator to Speak at AGC Convention
President Releases FY 2020 Budget Request
Tax & Fiscal Affairs
AGC-Backed Bill Introduced to Fix “Retail Glitch”
Regulations
DOL Releases Proposed Overtime Update
Federal Construction
AGC Presents USACE Leadership with Change Order Recommendations
Environment
AGC-Backed DERA Authorization Bill Introduced in Senate
Workforce
AGC-Backed Construction Guest Worker Visa Bill Introduced
 
On March 13, Rep. Lloyd Smucker (R-PA) introduced AGC-supported legislation, H.R. 1740, in the House that would help fill the visa gap for year-round construction workers, among others. Current law allows legal immigration for high tech, agriculture and seasonal workers. However, there is no dedicated visa for typical construction occupations. AGC views the legislation as a complement to its efforts to help address the industry’s worker shortages as well as a critical ingredient for immigration reform. 
 
The bill creates a market-driven visa program that would match employers with potential immigrant laborers by creating temporary visas for guest workers if local market conditions warrant and U.S. workers cannot be found. The program would have an annual cap and would fluctuate based on demand, with a number of wage and labor protections to further protect American workers. 
 
For more information, contact Jim Young at youngj@agc.org
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Infrastructure
House Panel Weights Path Forward on Infrastructure Legislation
AGC Testifies before House Transportation & Infrastructure Committee
 
On March 13, Al Stanley—a current contractor member of the AGC of America Board of Directors from the Alabama AGC—testified before the House Transportation and Infrastructure Subcommittee on Highways and Transit about the much-needed funding necessary to address the nation’s transportation and infrastructure needs, which especially includes the Highway Trust Fund’s revenue shortfall. Chairwoman Eleanor Holmes Norton (D-D.C.) called the hearing as the House begins to debate an infrastructure package and the need to reauthorize the federal aid-highway and transit programs. 
 
Stanley pointed out that not only is funding needed to address current poor road conditions, but also to advance transportation to the next level by modernizing the system. Stanley also addressed issues that slow construction of transportation facilities, including delays caused by railroad interfaces and relocating utilities. Stanley said that now is the time to act with bipartisan support in Congress and from the Administration. 
 
For more information, contact Brian Deery at deeryb@agc.org
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FHWA Acting Administrator to Speak at AGC Convention
Headlines Highway and Transportation Session on April 2
 
Federal Highway Administration (FHWA) Deputy (Acting) Administrator Brandye Hendrickson will headline the Highway and Transportation Contractors Division Session (April 2 at 10:30 am) at AGC’s 100th Annual Convention April 1-4, 2019 in Denver, Colorado. Ms. Hendrickson has headed FHWA for the past two years after having built a reputation as a strong transportation leader while Commissioner of the Indiana DOT. For more information on the AGC convention, including registration, follow this link.
 
For more information, contact Brian Deery at deeryb@agc.org
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President Releases FY 2020 Budget Request
Includes Infrastructure Plan Fact Sheet
 
On March 11, the White House Office of Management and Budget (OMB) released the president’s fiscal year (FY) 2020 top-line budget request. In tandem with this request, OMB released an infrastructure fact sheet calling for long-term surface transportation reauthorization, solvency of the highway trust fund, and an additional $200 billion investment for other infrastructure priorities. AGC will further analyze the impacts of the FY2020 budget on the construction industry upon the March 18 release of the full budget request.  
 
For more information, contact Sean O’Neill at oneills@agc.org
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Tax & Fiscal Affairs
AGC-Backed Bill Introduced to Fix “Retail Glitch”
Would Help Retail, Restaurant Renovation Projects
 
On March 14, a bipartisan group of senators--led by Sens. Pat Toomey (R-PA) and Doug Jones (D-AL)— introduced AGC-supported legislation to correct a drafting error from the Tax Cuts and Jobs Act (TCJA, the 2017 tax reform law), that inadvertently extended the depreciation schedule for interior improvements to commercial properties from 15 years to 39 years. AGC has heard from many contractors and service providers that this error is materially impacting construction projects across the country, forcing building owners to delay or reconsider projects.
 
Prior to passage of TCJA, any interior improvements to commercial properties (designated in the tax code as “restaurant, retail and leasehold improvements”) could be depreciated over 15 years.  The TCJA included a provision that sought to simplify this section of the code by consolidating multiple classes of infrastructure eligible for the 15-year depreciation schedule into a new definition, called “qualified improvement property” or QIP.  
Additionally, under this section of the Internal Revenue Code, QIP was intended to be eligible for temporary 100 percent bonus depreciation, thus allowing these commercial improvements to be expensed in one year until the temporary full expensing expires in 2023.  However, due to a drafting error, the TCJA inadvertently changed QIP’s depreciation schedule from 15 years to 39 years.  This is a substantial change, significantly affects cost-recovery and must be addressed to help many of these construction improvement projects get back on track.   
While a drafting error should be relatively easy to fix legislatively, unrelated partisan interests have thus far prevented passage of all but a few “technical corrections” from the TCJA.  Securing bipartisan support for this bill is a significant step towards fixing this unintended problem.
 
For more information, contact Matt Turkstra at matthew.turkstra@agc.org
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Regulations
DOL Releases Proposed Overtime Update
Sets Annual Salary Threshold at $35,308
 
On March 13, the U. S. Department of Labor’s (DOL) Wage and Hour Division (WHD) announced a Notice of Proposed Rulemaking (NPRM) updating the Fair Labor Standards Act (FLSA) overtime regulations. This new proposal would update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary threshold for exempt employees from $455 to $679 per week (equivalent to $35,308 per year). The NPRM comes following a 2017 Request for Information (RFI) and is in line with AGC’s formal recommendations
 
Specifically, the NPRM includes:
  • The proposal increases the minimum salary required for an employee to qualify for exemption from the currently-enforced level of $455 to $679 per week (equivalent to $35,308 per year);
  • The proposal increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year;
  • A commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking;
  • Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level;
  • No changes overtime protections for:
    • Laborers including: non-management production-line employees
    • Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers;
  • No changes to the job duties test; and
  • No automatic adjustments to the salary threshold.
AGC will continue to provide input to the DOL on the impact this update 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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Federal Construction
AGC Presents USACE Leadership with Change Order Recommendations
Recommendations Also Detail Other Industry Best Practices
 
On March 11, AGC met with Lt. Gen. Todd Semonite, U.S. Army Corps of Engineers (USACE) Chief of Engineers and Commanding General, and other USACE leaders. AGC formally presented the “Associated General Contractors of America’s Recommendations Regarding the U.S. Army Corps of Engineers.” Among others, the recommendations include a streamlined change order/contract modification process, an outline of key USACE personnel performance indicators, leading project indicators for early detection and correction to improve project delivery outcomes, and a number of other best practice suggestions. 
 
For more information, contact jordan.howard@agc.org or (703) 837-5368.
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Environment
AGC-Backed DERA Authorization Bill Introduced in Senate
Would Annually Provide $100M in Grants for Diesel Retrofits
 
On March 12, a bipartisan group of senators—led by Tom Carper (D-DE) and John Barrasso (R-WY)—introduced an AGC-backed bill to reauthorize the Diesel Emissions Reductions Act (DERA) program.  The bill would provide $100 million annually through fiscal year 2024 for grants and rebates to states and localities to upgrade or replace older diesel engines, including off-road construction equipment.  AGC chapters – working with AGC of America – have won millions in federal funds to support AGC members’ voluntary retrofit projects, in addition to leveraging millions more in matching and in-kind contributions to help their members afford the high cost of reducing emissions from construction equipment.
 
AGC will continue to work with Congress and the administration to ensure they recognize the importance of the DERA program and they provide greater financial assistance to the many equipment owner who seek a fair and effective way to reduce emissions from existing fleets of off-road equipment.
 
For more information, contact Sean O’Neill at oneills@agc.org
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