On Tuesday, March 23, President Obama signed into law the Patient Protection and Affordable Care Act, capping a year of intense and at times partisan debate. In the end, 34 Democrats joined all Republicans in opposing the measure in the House, and all Republicans opposed the measure in the Senate.

Following passage, both chambers of Congress passed a reconciliation package that makes slight changes to the bill, including removal of language that exempts a single industry, construction, from the small business exemption that was included in the law just signed by the president. However, before all the reconciliation changes can be made to the law, it must pass the House one more time, likely today or later this week.

AGC opposed the $1 trillion package from the beginning because of the complexity of the plan, the $500 billion in new taxes on employers and individuals, the new mandates on employers, the cost shifting rather than cost reductions and the likelihood that it will increase insurance costs for those who already have and provide insurance.

The Patient Protection and Affordable Care Act will be phased in over the next eight years and includes an individual requirement to have health insurance, creates new state-based exchanges, requires employers to provide health care benefits, provides cost sharing for low-income individuals and expands Medicaid.

Assuming the reconciliation bill passes, the following changes will affect the construction industry:

• Employers with 50 or fewer employees will be exempt from providing coverage to their employees. The Senate bill had only exempted construction firms with five or fewer employees from the mandate, but AGC worked with other construction trade groups to repeal this provision that targeted the industry. In addition, the penalties for a waiting period of less than 90 days have been removed.
• Some small employers could be eligible for temporary small business tax credits to offset a portion of the cost of providing coverage, but the credit phases out as firm size and average wage increases. The credit will be available for only two years.
• The bill will limit contributions to FSAs and restrict the purchases for over-the-counter products from using FSA funds.
• The bill places a 40 percent excise tax on "Cadillac" health plans beginning in 2018. Under the reconciliation package the tax is placed on plans that have an aggregate value that exceeds $11,850 for individuals and $30,950 for firms in the construction industry.
• In 2014, new state-based exchanges will be created for individuals, and eligible small employers will be phased in.
• The bill also restricts the construction and expansion of existing physician-owned hospitals.

The White House is strongly considering using the upcoming Congressional Recess to appoint attorney Craig Becker to the National Labor Relations Board (NLRB), despite the fact that the Senate has already refused to confirm the nomination of Becker to a five-year term on the Board, effectively blocking his confirmation. A recess appointment is a way for the president to do an end run around Congress. If the recess appointment is made, it would last until the end of this year.

Read more on Becker here.

AGC opposed the nomination of Mr. Becker to the NLRB because of his controversial positions on labor law.   AGC joined other associations on a letter to the president outlining our opposition to a recess appointment.  In addition, all Senate Republicans sent a letter to President Obama asking him not to use the upcoming two-week break to make this recess appointment. 

Please use the Legislative Action Center to contact the White House and your Senator to inform them of your opposition to the recess appointment of Craig Becker.

Last week, the House Education and Labor Committee released a discussion draft of the Protecting America's Workers Act (PAWA).   The draft is focused on: increased whistleblower protections; changes to the appeals process for the abatement of hazards; victim's rights; and civil and criminal penalty increases. 

AGC is reviewing the new discussion draft to determine the changes to current law and the impact it would have on the industry.   It is expected that the House Committee will take action on this bill in April.

The congressional primary season is heating up, and retirements and ethics problems continue to dominate the headlines.  This week voters in Texas went to the polls to cast primary ballots, while other members of Congress announced they would not seek re-election.

The biggest race in Texas was the Republican primary gubernatorial contest between Governor Rick Perry and U.S. Senator Kay Bailey Hutchison, which Perry easily won.  There were few surprises in the congressional primaries and most incumbents in Texas appear to be safe in November's election.

In other changes, Rep. John Linder (R-Ga.) and Eric Massa (D-N.Y.) announced they would not seek re-election. New York Congressman and chairman of the Ways & Means Committee, Charlie Rangel (D-N.Y.) announced he would temporarily step down from the chair while the Ethics Committee reviews some of his past actions.

With only 242 days until the November elections, AGC members attending the 91st Annual Convention are reminded to attend the AGC Legislative Issues Luncheon, featuring a full legislative and regulatory issues rundown by AGC's Government Affairs Team, as well as the AGC Political Action Committee Contributions Subcommittee Meeting.

The Senate passed legislation to reauthorize Federal Aviation Administration (FAA) programs and funding for two years. Included in the legislation is $8.1 billion for the Airport Improvement Program (AIP), the primary source of federal funding for airport capital projects, $4 billion in FY 2010 and $4.1 billion in 2011.

The program is currently funded at $3.5 billion. The Senate bill would also allow six airports (to be determined in the future) to raise the passenger facility charge (PFC) on airline flights from $4.50 to $7.00. The House passed a four-year authorization in July 2009, and included a total of $16.2 billion for AIP grant funding and allows all airports to increase the PFC from $4.50 to $7.00, which is estimated to generate $1billion per year in additional revenue for airport infrastructure investment.

AGC is working in support of allowing the PFC ceiling to increase for all airports to $7.00. The House is likely to amend the Senate bill, which will allow the Senate to either ask for a conference to settle the differences or else allow informal negotiations to settle the differences, leading to another exchange of amendments between the House and Senate.

Considering this scenario, it is unlikely Congress will approve a reauthorization bill prior to the current extension, which expires on March 31.  To prevent any disruption in the programs, the House passed a bill to extend FAA authorization until July 31, 2010, which changes the way that $745 million in highway funding under the Projects of National and Regional Significance and Corridor programs will be apportioned to states in FY 2010. The Senate has yet to act on the extension.

During AGC's 91^st Annual Convention, the PAC Contributions Subcommittee approved $387,000 worth of political contributions to be distributed to Congressional who support the construction industry. 

Candidates are approaching a critical pre-primary Federal Election Commission filing deadline at the end of March. There is no better time to contribute to the PAC and support AGC's efforts on the Hill to help improve the construction industry in this difficult economic time.  Primary elections are being held in Indiana, North Carolina, and Ohio in just a few weeks. With your contributions, AGC can continue to be involved in these important races.

President Obama today signed the "jobs" legislation, which the Senate approved yesterday thanks to AGC's continued advocacy and an effective grassroots lobbying effort. The bill, known as the "HIRE Act," includes the following provisions of importance to the highway construction industry:

• Extends highway program authorization through December 31, 2010 at current funding levels.
• Provides additional revenue to keep the Highway Trust Fund solvent through the first quarter of 2011 by restoring $19.5 billion in interest payments foregone on the HTF's previous cash balances.
• Restores $12 billion in highway spending authority that was cut on September 30, 2009 due to an $8.7 billion budget rescission in SAFETEA-LU and a subsequent rescission of $3.2 billion.
• Authorizes payment of interest on future HTF balances.
• Alters the way in which long-standing fuel tax exemptions provided to state and local governments are accounted for, which are projected to increase HTF balances by about $1.7 billion annually, for a total of $9.8 billion over six years.
• Provides $4.6 billion in additional authority for Build America Bonds which have been used extensively by state and local governments to fund infrastructure projects, including highway and bridge projects.
• Extends section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures in 2010 in lieu of depreciating those costs over time.

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

Today, the House released a draft reconciliation bill that will be used to move the Senate's Health Care Reform package that passed last December through Congress. A vote is expected by Sunday, March 21 in the House. If the bill passes on Sunday, it would be sent to the President for his signature, and the Senate would then begin the process of debating a reconciliation bill to amend the new law.

The process that Democratic leaders are taking is unprecedented for such a large piece of legislation and a provision that removes the small business exemption, commonly known as the Merkley Amendment, remains included in the bill. AGC is urging Congress to eliminate the provision for the following reasons: unions and construction associations who endorsed the amendment represent less than 15 percent of total construction employees and represent less than 3 percent of America's construction companies; the five employee and $250,000 threshold is out of line with the House bill and the Senate bills passed out of committee; the provision is out of line with other human resource laws and out of step with very common concerns about the impact of government regulations on small businesses; and, finally, the provision is an inexcusable and direct attack on small businesses in the industry most battered by the recession.

AGC urges members to continue to communicate on the need to remove this provision via the AGC Legislative Action Center.

President Obama today signed the "jobs" legislation, which the Senate approved yesterday thanks to AGC's continued advocacy and an effective grassroots lobbying effort. The bill, known as the "HIRE Act," includes the following provisions of importance to the highway construction industry:

• Extends highway program authorization through December 31, 2010 at current funding levels.
• Provides additional revenue to keep the Highway Trust Fund solvent through the first quarter of 2011 by restoring $19.5 billion in interest payments foregone on the HTF's previous cash balances.
• Restores $12 billion in highway spending authority that was cut on September 30, 2009 due to an $8.7 billion budget rescission in SAFETEA-LU and a subsequent rescission of $3.2 billion.
• Authorizes payment of interest on future HTF balances.
• Alters the way in which long-standing fuel tax exemptions provided to state and local governments are accounted for, which are projected to increase HTF balances by about $1.7 billion annually, for a total of $9.8 billion over six years.
• Provides $4.6 billion in additional authority for Build America Bonds which have been used extensively by state and local governments to fund infrastructure projects, including highway and bridge projects.
• Extends section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures in 2010 in lieu of depreciating those costs over time.

In his first hearing as chairman of the House Ways and Means Committee, Rep. Sander Levin (D-Mich.) pushed for legislation that would provide tax incentives for small businesses and lending assistance for infrastructure projects.

AGC sent a letter to committee members in advance of the markup highlighting its support for several provisions, including:

• Relief for small businesses from IRS Section 6707A penalties, which can be stiff for contractors who unwittingly fail to disclose listed transactions to the IRS.
• Extension of the Build America Bonds (BAB) program. State and local governments have used the widely successful BABs to finance more than $80 billion in infrastructure programs.
• Removal of the private activity bond volume cap for water and wastewater projects. The private activity bond cap removal is expected to leverage nearly $2 billion in private sector dollars waiting on the sidelines.
• Extension and reallocation of the Recovery Zone Bond program. The Recovery Zone Bonds will be extended and reallocated based on unemployment in a locality, allowing the hardest hit areas to receive a higher amount of funding opportunities.

AGC asked for the legislation to include "Fresh Start" and ensure that all of the losses are subject to 30-year amortization for pension plans, as pension relief was included in early drafts of the bill, but was dropped from the legislation prior to the markup.

One section of the bill that AGC opposed in its letter would apply continuous levy to employment tax liability of certain federal contractors.  This provision would allow the IRS to levy employment taxes on federal contractors prior to a Collection Due Process (CDP) hearing. AGC opposes a collection of a tax that has not been subjected to due process.

The full House is expected to consider the new legislation as early as next week.