AGC participated in a town hall-style meeting with U.S. Department of Transportation's top leaders who addressed the next long-term transportation bill.  This meeting was the final event in the Department's series of "listening tours" leading up to its release of the surface transportation principles. 

The senior DOT officials provided very few specifics about their current thoughts regarding various aspects of a surface transportation bill and provided no answer when asked when they will release their principles for reauthorization.  DOT officials did however pledge their support for a long-term funding authorization and expressed the need to expedite the process of approving and finishing construction projects.

With the administration not taking the lead on reauthorization and the House and Senate yet to move on their individual bills, the chances of seeing a surface transportation bill before the elections in November is highly unlikely.  AGC will continue to urge both House and Senate leaders to take action and remind them of the importance of infrastructure investment and its ability to create jobs.

AGC of America this week signed a letter to Congress with over 312 companies and 80 employer organizations to express concern about misinformation circulating regarding multiemployer defined benefit plan relief proposals before Congress.  Joining AGC of America in signing the letter are 11 AGC Chapters and 45 AGC member firms. 

Recent press stories have referred to H.R. 3936, the Preserve Benefits and Jobs Act, and S. 3157, the Create Jobs and Save Benefit Act, as a "union bailout" and to multiemployer plans as "union plans."  The letter states that contributions to multiemployer plans are funded entirely by employers and not unions.

The majority of defined benefit plans have been negatively impacted by the recent financial crisis, and the median investment loss by multiemployer plans has exceeded 20 percent.  The losses occurred in the first year of new aggressive funding rules required by the Pension Protection Act, giving rise to potential additional contribution increases, deep benefit cuts, or both.  The financial crisis also exacerbated funding problems that certain multiemployer plans were already facing prior to the market downturn.  For details on the House proposal, clickhere.

Asreported on July 1, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, a stand-alone measure to prevent a scheduled cut in Medicare reimbursements to physicians.  While the relief now enacted into law is not the preferred language advocated by AGC and the multiemployer pension community, there may be an opportunity to enact "technical corrections" or otherwise provide Congressional guidance to the Treasury who will now interpret the law to ensure the intent of the preferred language is followed. 

AGC and the multiemployer coalition is continuing to work on additional longer-term relief for more troubled multiemployer plans, including the "partitioning" proposal included in H.R. 3936 and S. 3157.  In May, the Senate Health, Employment, Labor, and Pensions Committee last Thursday held hearing on multiemployer pension plans, including S. 3157.  The hearing was a first step towards Congressional action on additional multiemployer plan relief called for in H. R. 3936 and S. 3157 that would facilitate mergers and alliances of funds and allow the Pension Benefit Guaranty Corporation (PBGC) to provide assistance to certain plans (e.g., Central States) through a process called "partitioning" to lower long-term costs.  The bill would also update PBGC benefit guarantees.

A stalemate over a small business jobs bill (H.R. 5297) continued this week in the Senate.  The Senate had adjourned for the July 4^th recess after beginning debate on the measure, which includes a package of tax cuts and provisions to increase access to capital for community banks and small businesses.

Senate Democrats have not been able to reach agreement within their own caucus and with Republicans on amendments for floor consideration.  One issue that is causing disagreement is a proposal offered by Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) that would make permanent changes to the now-expired estate tax.  The proposal would set the top rate at 35 percent with a $5 million exemption level for individuals ($10 million for couples) phased in over 10 years and indexed for inflation.  It also would provide a stepped up basis for inherited assets.  The Senators' plan would allow the estates of taxpayers who die in 2010 to choose between the current rate of zero with a modified carryover basis or their proposal establishing a top rate of 35 percent. 

There is also pressure for the Senate to consider extensions of the expiring 2001 and 2003 tax cuts on which Senators are wary to vote prior to the November elections, as well as on other pieces of stalled legislation, including the annual tax extenders package.

AGC supports a provision in the small business jobs bill that would extend enhanced section 179 expensing and bonus depreciation through 2010.  AGC is working with Senator Landrieu on an amendment that would allow for the modification of the bonus depreciation extension to allow contractors engaged in long-term contracts that use the percentage-of-completion (PCM) method of accounting and purchase 7-year depreciable property to take bonus depreciation. 

AGC submitted a statement for the record of a House Small Business Committee hearing Wednesday on bonus depreciation in support of the one-year extension and the modification under consideration in the Senate. 

AGC has also advocated in support of another provision in the bill that would provide relief from section 6707A penalties for taxpayers who failed to timely and properly disclose a transaction the Internal Revenue Service (IRS) characterizes as a "listed transaction."

The Senate passed the conference report to H.R. 4173, Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill will now go to the President for his signature.

The legislation was opposed by the banking industry because it would significantly impact fees banks charge while adding new regulations and oversight over lenders, and create the Consumer Financial Protection Bureau. While this legislation does not directly address the construction industry, small lenders that work with the construction industry were concerned about the treatment of trust preferred securities. The final version allowed banks under $15 billion in assets to keep current trust preferred securities in place while requiring bigger banks to divest these assets over the next five years.

Robert A. Murray, McGraw-Hill Construction's vice president for economic affairs, says its short-term impact on construction lending would be "neutral to somewhat negative." He says, "The [bill's] greater emphasis on regulation and the adaptation of the banking industry to this new environment may push back the timing when lending conditions can improve."

It will take a while to really understand the impact of the new law on the construction industry (or really any other industry). The bill calls for 399 individual rule makings and 46 studies before it is fully implemented.

EPA Administrator Lisa Jackson has declared the cement-lined Los Angeles river as "navigable," allowing her agency to enforce Clean Water Act protections throughout the river's 834-square-mile watershed.

Recent Supreme Court rulings have strictly interpreted "navigable" as the means of determining which water bodies deserve federal regulatory protections aimed at limiting industrial discharges and protecting wetlands.

Repeated efforts by Democrats in Congress to strike the word "navigable" from the Clean Water Act and expand federal regulatory power have failed in the face of intense opposition from agricultural and other industry opponents. The most recent effort appears stalled.

The L.A. River's new designation represents a dramatic change from two years ago, when the Army Corps of Engineers proposed declaring limited stretches of the river navigable.

Confusion over what waters should be deemed "navigable" stems from two Supreme Court decisions — Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers in 2001 and Rapanos v. United States in 2006.

EPA sources report the agency is currently looking at another river, the Santa Cruz in Arizona, to evaluate its legal status as a "traditional navigable water."

AGC will continue to monitor these efforts by EPA and oppose legislative efforts to expand the reach of the Clean Water Act in this manner.

AGC submitted comments this week on an advance notice of proposed rulemaking (ANPR) issued May 13, titled Enhancing Contract Transparency. The rule presupposes that, given the direction the administration is moving with the president's Freedom of Information Act (FOIA) memo, Transparency and Open Government memo, andOpen Government Initiative, as well as the Attorney General's new FOIA Guidelines and the Office of Science and Technology Policy's Open Government Plan, a requirement is likely forthcoming to post the text of contracts, task orders, and delivery orders online.

In order to best be able to execute this future requirement, the rule asks for public comment concerning how best to implement a system of posting these documents online. AGC was pleased that the ANPR was concerned with facilitating the posting without violating statutory and regulatory prohibitions against disclosing protected information (belonging to either contractors or the government), but had serious reservations with the ANPR's conclusion that it may not be practical to apply full FOIA procedures in every case.

AGC requested in its comments that FOIA procedures for protection of information be applied as the minimum standard of protection for disclosure of any text of the documents. AGC also provided a non-exhaustive list of information that the construction contracting community expected to be protected (and the accompanying regulatory citations that guaranteed their protection). AGC will continue to monitor the progression of this rule and fight to protect against the disclosure of sensitive and important contractor information.

An interim rule was issued that brings many of the reporting requirements first made public in the American Recovery and Reinvestment Act to the broader scope of federal contracting. The rule calls for reporting executive compensation and first-tier subcontract awards if the prime contractor and its subcontractors meet certain thresholds. It is based on the same point of law, the amended Federal Funding Accountability and Transparency Act of 2006 (a product of then-Senator Obama and Senator Tom Coburn [R-Okla.]).

Under this rule, a prime contractor is required to report for disclosure on www.usaspending.gov the names and compensation of their five most highly compensated officers if in the preceding year the contractor received $25 million or more in revenues from federal contracts and subcontracts and 80 percent or more of its annual gross revenues from federal contracts and it does not already file this information with the SEC. All three must be satisfied to trigger the compensation reporting. The prime contractor is also required to collect and report this compensation information for its first-tier subcontractors if the subcontractor meets the three triggers and the subcontract is for $25 thousand or more.

The prime contractor is also required to report to the system every subcontract if the prime contract is $25 thousand or greater. This requirement is phased in however, as follows:

1.     Until September 30, 2010, any newly awarded subcontract must be awarded if the prime contract award amount was $20 million or more.

2.     From October 1, 2010 until February 28, 2011 any newly awarded subcontract must be reported if the prime contract award was $550 thousand or more.

3.     Starting March 1, 2011, any newly awarded subcontract must be reported if the prime contract award amount was $25 thousand or more.

This is an interim rule, and as such it became effective upon publication and will operate unless and until a final rule is enacted. User guides, FAQs, and an online demonstration are available at the Federal Subaward Reporting System website, www.fsrs.gov. AGC will submit comments on the interim rule before the September 7 deadline.

As reported in The Hill, AGC has repeatedly urged Congress and the Administration to act on a range of infrastructure bills, given that the stimulus is running out but private sector demand has yet to pick up. 

Several key pieces of infrastructure legislation remain is Congressional limbo, including authorizations for the surface transportation program, airport construction, and the drinking water and wastewater SRFs. All are in various states of completion, but given the relatively few remaining legislative days, action now is critical to the long-term health of the construction industry and the economy.

Read more in the article from The Hill.

The last three weeks in July could be the busiest of the 111th Congress. Many issues are left outstanding, particularly in the Senate, and several others are crowding the legislative calendar.

Dominating the news cycles has been the Senate's failure to extend federal unemployment insurance. It is likely that the Senate will again take up this vote when members return from the week-long July 4th recess on July 12. The outcome, however, is very unclear. The extension failed to pass late last month because of the $33.3 billion price tag. Budget concerns also stopped the annual tax extenders package, which contained provisions supported by AGC, from moving forward.

Also waiting on Senators' desks will be the confirmation vote for President Obama's nominee for the Supreme Court, Elena Kagan. While her confirmation is expected, the debate and vote will use precious floor time. In addition, the Senate must also take up the final post-conference version of the Financial Regulatory reform legislation that passed the House late last month, and may resume consideration of a small business jobs bill.

Also passed by the House last month and waiting for potential Senate pickup is the AGC-opposed DISCLOSE Act, which stifles the right of trade associations and corporations to speak out on behalf of the political candidates they support. Read more about that bill here. Democrats particularly are looking to get this bill passed to help their prospects in the midterm elections this November, where they are forecasted to receive substantial losses in both chambers.

Other outstanding issues include authorizations for the Surface Transportation Program and the water and wastewater state revolving loan fund (SRF) programs. The SRF program has been stalled in the Senate over disagreement about the bill's application of Davis-Bacon prevailing wage requirements. While the transportation program has been granted a short-term extension until the end of the year, the Senate has yet to unveil its version of a longer-term bill, which would then have to go through markup and approval by multiple committees before seeing floor time. The future of the majority of federal-aid work that AGC members perform is locked up in these two bills.

Also left outstanding in the House and Senate is the next Department of Defense Authorization bill, which has several important possible changes to federal contracting as well as billions in military construction work. A permanent fix to the estate tax seemed to have momentum behind it earlier in the year, particularly because the rate fell from 45 percent in 2009 to zero percent for this year and is scheduled to jump up to 55 percent next year, but the outlook is murky at best. Other big issues include administration priorities like climate change and immigration reform, and, potentially, contracting reform. Also looming is possible legislation dealing with the BP oil spill from the Deepwater Horizon site, as well as Congressional repeal of the military's "Don't Ask, Don't Tell" policy.

In the upcoming weeks, Government Affairs will send PAC regional coordinators, state chairmen, Chapter executives and government affairs representatives a PAC and grassroots toolkit. 

The kit will contain all the tools to encourage AGC members to get involved in the PAC and grassroots movements, including letters, talking points for members attending AGC meetings, contribution histories, and Congressional vote scores, among other things.

The toolkit is designed to help AGC's legislative network grow. For more information, contact Blair Hood at (202) 547-5013 or hoodb@agc.org.