** Action Requested **

 Time is running short for Congress to take action on a multi-year highway and transit reauthorization bill. SAFETEA-LU authorization expired on September 30, 2009 and the program has been operating under short term extensions ever since. In addition, the Highway Trust Fund is depleted and infusions of general fund revenue have been needed for it to meet its obligations. Members of Congress will be home next week for the Fourth of July recess and also in August. This is an excellent time to make them aware of the impact this lack of action by Congress is having on your state's highway construction program. 

AGC and our Transportation Construction Coalition partners have created a grassroots toolkit for your use in discussing this issue with your Senators and Representatives, urging them to pass a long-term, well-funded surface transportation bill when they return to Washington.

 You may access the grassroots toolkit by clicking here. http://transportationconstructioncoalition.org/grass-roots-kit.htm

Materials include:

• Information about the pending highway and transit funding crisis
• Background on the surface transportation legislation and its current status
• Talking points on why Congress needs to act on highway legislation
• List of key questions to ask members of Congress about their support for fixing traffic, improving road conditions and safety
• Instructions on how to arrange meetings with members of Congress in the home district, attend local town halls
• State by state TRIP fact sheets about local highway funding needs
• Traffic congestion information from the Texas Transportation Institute
• Tips for contacting members of Congress by letter or email

 On the web page, you'll also find a form that will allow you to report any progress you make over the July 4^th Recess.  TCC's goal is to make sure every member of Congress hears about the need for a surface transportation bill.

We hope you will find these resources helpful as we all work to show Congress the value of investing in our nation's transportation systems. The TCC plans a second phase of this effort for the August recess, which will include an aggressive media campaign to raise awareness of this important issue. More information is forthcoming.

Please let me know at deeryb@agc.org if you have any questions. We urge you to take advantage of these resources and report back on any progress.

The House Appropriations Subcommittee on Transportation today marked-up the FY 2011 transportation spending bill.  The bill provides $45.2 billion for the highway program, an increase of more than $4 billion over this year's funding level of $41.07 billion and  President Obama's budget request of $42.36 Billion. The bill also would provide $11.3 billion for transit program funding, a $500 million increase over the President's budget request.

 The bill also provides $3.5 billion for the Airport Improvement Program, the same amount as appropriated in previous years and $1.4 billion for high-speed passenger rail, a $400 million dollar increase from the President's budget request but a $1.1 billion decrease from FY 2010.  In addition, the bill provides $400 million for TIGER Grant programs while failing to provide the $4 billion requested by the President for a National Infrastructure Innovation and Finance Fund.

 At this time it is unclear if or when the full committee will consider the transportation spending bill.  If they fail to act prior to the end of FY 2010 the transportation programs will continue to operate at current funding levels. Congress must also act to provide the necessary authorization as the current short term extension expires on December 31, 2010 the end of the first quarter of FY 2011. In addition, more revenue will be needed in the Highway Trust Fund as the current revenue will only support funding through mid 2011.

Following months of AGC and other transportation construction stakeholders successfully lobbying Congress and the administration to restore $8.7 billion of rescinded highway contract authority, the House of Representatives is poised to take $2 billion of that unobligated money away to offset a $10 billion appropriation to preserve teachers' jobs included in the House supplemental appropriations bill. 

The intent of the bill is to provide funding for U.S. troops; however, the House Appropriations Committee added additional funding that required an offset of $11.7 billion.  As co-chair of the Transportation Construction Coalition, AGC sent a letter to Congress opposing the House supplemental proposal, and argued that the rescission creates further uncertainty in an already-suffering transportation construction marketplace. AGC also argued that it raises questions about future federal transportation investment commitments.

Congress approved a bill to extend aviation programs and excise taxes through Aug. 1. The short-term extension will give lawmakers another month to attempt to finalize a multi-year FAA reauthorization bill.

Both the House and Senate have passed long-term authorization bills but they are very different. An attempt was made to pass a longer term extension to allow time for compromise legislation to be negotiated, but that effort failed. Upon its return Congress will hopefully get to work on resolving the different bills.

AGC has been receiving inquiries these past few days from highway contractors and AGC chapters from around the country concerning the shortage of a variety of pavement marking materials. AGC has learned that a number of factors have conspired to create a significant shortage in supply of these materials. These factors include a breakdown of a Dow Chemical plant that produces the majority of the feedstock for a resin used in the production waterbourne traffic paint, and shortages in the supply of Titanium dioxide, widely used as a whitener for paint and other products, and rosin esters, the primary resin system used in alkyd-based thermoplastic.

In addition to shortages, the price of these materials have already increased and are expected to continue to increase significantly. Supplies of these paints are running 40 to 50 percent below project demand.

From what AGC has learned, Dow chemical and several of the major paint and marking material suppliers have taken the dramatic step of protecting their interests by claiming a "force majeur" exemption to relieve themselves of liability under their contracts for failure to meet contract requirements.

AGC has contacted FHWA and AASHTO to urge that they work with the state DOTs to develop a contingency plan to ensure that critical highway construction projects can move forward safely to completion, including final stripping and to ensure that there are no negative ramifications for contractors, subcontractors or suppliers for events that are out of their control.

AGC chapters and contractors have been meeting with their state DOTs to discuss a variety of remedies that may provide at least temporary relief, including extension of contract deadlines, change orders, prioritizing stripping requirements and easing up on MUTCD specification requirements, at least temporarily, until this shortage is resolved.

Please keep us informed of what's happening in your state and remedies that have been effective.

The Federal Highway Administration (FHWA) issued guidance to state DOTs advising them on implementation of President Obama's Executive Order 13502 encouraging the use of Project Labor Agreements (PLAs). The order specifically permits the use of PLAs on projects receiving federal financial assistance, including the federal-aid highway program. While the order directs the Office of Management and Budget (OMB) to issue guidance on the use of PLAs on federally-assisted projects, OMB has not yet acted. FHWA indicates that following issuance of guidance by OMB new FHWA guidance may be necessary.

Generally the guidance states that a decision to use a PLA is a state determination. FHWA will consider the request for the use of a PLA as part of its normal review of project requirements. The use of a PLA may be approved if the state DOT has made a reasonable showing that the use of the PLA on the project will advance the interests of the government. While the Order only applies to projects with a total cost of more than $25 million, FHWA indicates that PLAs can be used on projects below that threshold. FHWA spells out the factors that will be considered to determine if a PLA is in the governments interest, include: size of project, importance of the project timeline; risk of labor unrest on the project; impact of labor unrest on users; cost of delays caused by labor disruption; availability of labor with appropriate skills.

 A PLA that a state wishes to include in a contract must meet the following criteria to gain FHWA approval:

 a) Bind all contractors and subcontractors on the construction project through the inclusion of appropriate specifications in all relevant solicitation provisions and contract documents;

b) Allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

c) Contain guarantees against strikes, lockouts, and similar job disruptions;

d) Set forth effective prompt, and mutually binding procedures for resolving labor disputes arising during the PLA;

e) Provide other mechanisms for labor-management cooperation on matters of mutual concern, including productivity, quality of work, safety, and health; and

f) Fully conform to all statutes, regulations and Executive Orders.

The US DOT this week issued a Notice of Proposed Rulemaking   proposed changes in several sections of the Disadvantaged Business Enterprise regulations. Comments will be accepted until July 9, 2010. AGC will be submitting comments. The proposed revisions are as follows:

• Requires a state to present justification if they have not met the annual DBE goal and the steps it will take to remedy this situation in the future. States not meeting these requirements could lose their federal funding;
• Instead of annually submitting a DBE goal for Federal approval, states would now be required to submit its goal every third year;
• New oversight requirements are proposed;
• The personal net worth of an individual characterized as economically disadvantaged would be increased from $750,000  to $1.31 million with an annual adjustment for inflation;
• DBE certification would be transferrable from state to state;
• Requires states to develop steps to increase DBE participation such as unbundling contracts or offering bonding assistance;
• Requires states to approve the termination or substitution of a DBE after contract award in order to receive DBE credit;
• Retains existing policy denying states the ability to count material purchased from the prime by a DBE towards DBE accomplishment.  

Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) Wednesday released their long-awaited climate and energy legislation, the “American Power Act” (APA), which they say can achieve the 60 votes necessary to pass the Senate.  The legislation sets a mandatory cap on economy-wide greenhouse gas (GHG) emissions and establishes a mechanism for trading GHG emission allowances. The APA promises to cut U.S. emissions of greenhouse gases by 17 percent from 2005 levels by 2020 and 80 percent by 2050, consistent with President Obama’s pledge to the international community in December 2009.  It would still allow the EPA to regulate stationary sources under the Clean Air Act.

Transportation would be covered by requiring oil companies to purchase carbon allowances at a set price (established in quarterly auctions), which will result in higher motor fuels costs. AGC estimates these fees would generate at least $19.5 billion in revenue annually. Of this amount, the APA will allocate $6.25 billion annually for transportation improvements: $2.5 billion would go to the Highway Trust Fund, with a mandate to set aside funding for projects that decrease greenhouse gas emissions; $1.875 billion for federal TIGER grants awarded on a competitive basis to states and local governments; and $1.875 for local land-use planning, as laid-out in the CLEAN-TEA bill.

The draft bill gives the U.S. Department of Transportation and the Environmental Protection Agency one year to propose national transportation-related greenhouse gas emissions goals as well as require states and metro areas to develop unified strategies to measure their compliance with those goals, including from reductions in vehicle miles travelled.

Kerry-Lieberman would also require federal contracting agencies and other agencies receiving federal funding for construction of projects authorized by the bill to comply with President Obama’s Executive Order and subsequent rulemaking on PLAs, which was finalized in April 2010 and “encourages” federal agencies procuring construction projects greater than $25 million to “consider” the use of a PLA on the project.

AGC and its transportation stakeholders will send a letter and request meetings with Senators Kerry and Lieberman with the clear message that the amount of funding that they are providing to the Highway Trust Fund will not only fail to keep the trust fund solvent but will make it impossible to find the revenue necessary to pay for a multi-year surface transportation reauthorization bill.  AGC issued this statement in response to the bill.

The U.S. Environmental Protection Agency (EPA) announced today its intent to propose the first-ever national rules related to the disposal and management of coal ash from coal-fired power plants. Coal combustion wastes include coal ash and fly ash, which are both widely used in construction applications.

EPA intends to propose two potential regulatory paths the agency could follow under the Resource Recovery and Conservation Act (RCRA). One option is to regulate under Subtitle C, which creates a comprehensive program of federally enforceable requirements for waste management and disposal. The other option, under Subtitle D, gives EPA authority to set performance standards for waste management facilities and would be enforced primarily through citizen suits.

EPA stated its intention that this proposal would safeguard environmentally safe and desirable forms of recycling coal ash, known as beneficial uses. Under both approaches proposed by EPA, the agency would leave in place the "Bevill" exemption for beneficial uses of coal ash in which coal combustion residuals are recycled as components of products instead of placed in impoundments or landfills. Large quantities of coal ash are used today in concrete, cement, wallboard and other contained applications. EPA states that these "encapsulated" uses would not be impacted by the proposal, however, depending on the classification of the waste there may indeed be an impact resulting from the rule. AGC is concerned about implications for the shipping and handling of the material as well as any increased potential liability related to beneficial use.  AGC raised many of these concerns in a letter to EPA in November 2009.

The public comment period is 90 days from the date the rule is officially published in the Federal Register.  AGC of America is currently reviewing the 536 page proposal and will submit comments. If you would like to advise AGC in the comment-writing process, please contact Melinda Tomaino at tomainom@agc.org or 703-837-5415. More background information can be reviewed in AGC's Environmental Observer. 

 
EPA's proposed regulation can be viewed here.

Negotiations have broken down between Senators Kerry (D-Mass.), Lieberman (I-Conn.) and Graham (R-S.C.) on legislation intended to reduce greenhouse gas emissions. The stalemate is over issues unrelated to the legislation and therefore could potentially be resurrected at any time. How to deal with transportation is still unresolved. Discussions initially focused on imposing a fee on petroleum that would be passed on to consumers. The so-called "linked-fee", however, has been portrayed as a gas tax increase and the Senators backed away from supporting it.  However, they intend to have some type of carbon pricing mechanism requiring oil companies to buy pollution allowances for their activities. Language has been submitted to EPA for its evaluation.

AGC has been urging Senators to ensure that any revenue from additional fees on transportation motor fuels be directed into the Highway Trust Fund. AGC is concerned that should a fee be imposed and not directed to the Highway Trust Fund it would undermine efforts to increase trust fund revenues necessary to fund the transportation reauthorization legislation. To contact your Senators on this issue please click here.