The Federal Highway Administration (FHWA) has notified state DOTs that, as required by SAFETEA-LU, $8.7 billion in budget authority will be rescinded from their unobligated Federal-aid highway balances on September 30, 2009. While for some states this will not have a direct effect, in many states this order will result in an actual cut in funding for highway construction projects. Each state will lose budget authority in a proportion that matches its percent of the total highway funds that were provided over the six year life of SAFETEA-LU (FY 2004-2009). Congress included the $8.7 billion rescission in SAFETEA-LU as a way to make the total funding in the bill fit within federal budgeting parameters. At the time, the intent was to find other budget offsets to prevent the rescission from actually being implemented. However, Congress never took the necessary action. The impact on states will vary depending on the amount of unobligated budget authority each has on the books and in which highway funding categories. Senator Kit Bond (R-MO) attempted to remedy this situation with an amendment in July when Congress was taking action to keep the Highway Trust Fund solvent by transferring $7 billion from the general fund. While there was significant support to correct the rescission problem, it was not acted on and, therefore, FHWA is required to take this action. AGC is contacting Senators and Representatives pointing out the impact of this rescission on state highway programs and noting that this undermines efforts to create jobs through stimulus funding for highway and bridge improvements.

In the ongoing effort to stop California from implementing a rule to impose retroactive emissions standards on diesel construction equipment, AGC has written to the U.S. Environmental Protection Agency (EPA) urging that that the California Air Resources Board's (CARB) request for a waiver to implement the rule be denied. AGC's letter warns that construction companies nationwide will suffer significant financial losses and more construction workers will lose their jobs if the federal government allows California to proceed. AGC has formally petitioned CARB to reopen its rulemaking and persuaded CARB to direct its staff to "work with AGC" to get to the bottom of the several arguments that AGC included in its petition - and particularly its claim that the economic downturn has already reduced emissions from off-road diesel equipment to the point that CARB can relax its rule without compromising the agency's environmental objectives.  AGC has hired a consultant to analyze the data used by CARB to justify implementing the rule. In addition, AGC has urged U.S. EPA to hold hearings in California before deciding whether to grant California's request for federal approval of its rule.

Unless blocked, the CARB rule will require California's contractors to retrofit, repower, retire and/or replace much of their off-road equipment. The Federal Clean Air Act prohibits other states from implementing their own off road diesel emissions rule but allows them to adopt the California rule.  A study conducted by AGC shows that 32 states, including Arizona, Georgia, Illinois, Maryland, New York, Pennsylvania and Texas, are poised to use the California requirements. Because of the impact on contractor's nationwide, AGC joined with the California Chapters in a collective effort to stop the rule or significantly modify it. AGC held a conference call this week to update chapters with members that own significant equipment spreads on the status of the rule and AGC's efforts to stop it's implementation. Many AGC chapters have volunteered to contribute funds in support of the effort.