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Inside AGC September/October 2009 AGC Stays Atop Legislative And Regulatory Issues Keeping watch on behalf of AGC member companies nationwide With the new administration and Congress now in office for nearly a year, AGC has been hard at work educating those officials about the impact of proposed legislative and regulatory changes on construction firms nationwide. Read on for the latest updates on everything from reporting requirements associated with the stimulus legislation to highway and transit reauthorization. Card Check
The so-called Employee Free Choice Act [EFCA] would remove the right to a secret-ballot election as well as force expedited government mediation and arbitration, and subject employers to heavy civil fines. This bill is harmful to both open-shop and union employers. Efforts to pass EFCA have been stalled by grassroots efforts led by groups like AGC who are opposed to the bill; however, this legislation is far from dead. The House has the votes to pass the bill at any time. The barrier remains getting 60 senators voting to end cloture and move the bill to the Senate floor. A small group of Senate EFCA supporters are trying to find a compromise that will allow for the process to move forward and get past the cloture vote. AGC remains concerned that even a well-intentioned compromise proposal could become a Trojan horse that EFCA’s proponents would simply use to sneak EFCA past cloture. Unless and until EFCA’s proponents completely and irreversibly abandon that legislation, EFCA will remain too great a threat for the industry to entertain any discussion of compromise. Health Care In July, House congressional committees passed a bill that was opposed by AGC because the employer mandates failed to increase affordability and would restrict job growth through onerous payroll tax penalties, especially for small business owners and S corporations. Despite including the concept of exchanges, which AGC has supported in the past, the current proposed exchanges would limit access to all employers and the tax credits for small employers would provide little value. Meaningful malpractice reform also was absent from the legislation. At this writing, a group of six senators on the Senate Finance Committee are working toward finding a compromise to garner bipartisan support. AGC is concerned about the accelerated pace of the debate, the failure to include all stakeholders and the fear that reform may not deliver affordable, quality coverage without putting serious strains on the national debt. Project Labor Agreements On July 14, 2009, the Federal Acquisition Regulation Council issued a notice of proposed rulemaking to implement President Obama’s Executive Order 13502. The rule would create new FAR contract clauses to be included in federal contracts should an agency choose to require a project labor agreement. The proposed rule seems to implement the executive order carefully, without expansion, by encouraging but not requiring agencies to consider a PLA requirement on large-scale construction projects (defined as projects of $25 million or more). It expressly allows the contracting agency discretion to decide whether to require a PLA. AGC is working to encourage agencies to exercise this discretion prudently, leaving the decision of whether to perform the work under a collective bargaining agreement up to the contractor-employers and their employees, as provided under federal labor law. It is inappropriate for public agencies to use their contracting authority to interfere with labor relations among private employers and employees, something AGC explained in its comments on the proposed rule and directed to White House and other administration officials. Highway and Transit Reauthorization SAFETEA-LU, the current six-year legislation that provides authorization for federal highway and transit programs, expires on Sept. 30, 2009, and Congress must act before then to avoid disruption. The current reauthorization effort is even more difficult because the balance in the Highway Trust Fund has been spent down.
Congress has already provided two infusions of general fund revenue, totaling $15 billion, to ensure enough funds to reimburse states for ongoing construction projects through the end of fiscal year 2009. Projections from the Office of Management and Budget as well as the Congressional Budget Office indicate that, without additional revenue, the HTF will not be able to support funding at current levels, much less increase investment. Finding the additional revenue is the problem. Ninety percent of the HTF’s revenue comes from user fees paid on gasoline and diesel fuel. The last time the user fee was raised was in 1993. Since that time, it has lost over 60% of its purchasing power. In addition, increased gasoline prices, the expanded use of alternative-fuel vehicles and the economic downturn have all conspired to undermine the trust fund’s solvency. Finding alternative funding sources has been difficult, and increasing the motor-fuels user fee is politically unpopular. AGC continues to advocate the need for six-year reauthorization legislation with significantly increased revenues to address the nation’s growing transportation infrastructure deficit while working to ensure no interim disruption in program funding. Climate Change Congress is considering comprehensive energy and climate-change legislation to reduce U.S. greenhouse-gas emissions and energy consumption. The U.S. House of Representatives passed the American Clean Energy and Security Act of 2009 (H.R. 2454) on June 26 by a vote of 219 to 212. The Senate will consider similar legislation this fall. Even as Congress debates, the U.S. Environmental Protection Agency is laying the foundation to regulate greenhouse-gas emissions under the Clean Air Act in spite of the fact that industry groups as well as several government agencies, including EPA, have raised concerns that the act is ill-suited for the task. Central to H.R. 2454 is the establishment of a cap-and-trade program for reducing greenhouse-gas emissions from large emitters, which could increase the cost and market for construction. The bill also supports development of clean-energy technologies and infrastructure and promotes energy efficiency in buildings, transportation and appliances. Among its many provisions, it would trigger the development of emissions standards for smaller stationary sources, emissions standards for new heavy-duty trucks and off-road vehicles and requirements for transportation planners to reduce greenhouse-gas emissions from the transportation sector. Obama Contracting Reform Initiative President Obama established in a March 4 memorandum his principles for contracting reform and charged the Office of Management and Budget to identify the best ways to accomplish his goals. On July 29, the White House formally unveiled the first phase of the contracting and workforce reforms, designed to save taxpayers at least $40 billion a year. The reforms focus on three areas: improving acquisition, managing the multisector workforce and contractor performance information. The guidance requires agencies to reduce contracts by a minimum of 7%, with special focus on high-risk contracts such as non-competitive contracts and cost-reimbursement contracts. The guidance also requires agencies for the first time to track contractor performance through a new unified database, the Past Performance Information Retrieval System. The guidance tasks agencies to assess if they have achieved the best balance of public and private labor resources to serve the American people. A second phase of guidance, expected to further address competition, contract type and federal outsourcing, is expected to be released in September. AGC will continue to engage with key decision-makers on Capitol Hill as these issues further develop. Water Trust Fund
On July 14, Rep. Earl Blumenauer (D-Ore.) and others introduced the Water Protection and Investment Act of 2009 (H.R. 3202). This legislation creates a trust fund for drinking-water and wastewater infrastructure with a goal of raising $10 billion annually through a variety of user fees on water-based bottled beverages, products that are disposed in the wastewater streams, pharmaceuticals and a Clean Water Restoration Tax. Trust-fund dollars will be distributed through a combination of loans and grants via EPA’s Clean Water and Drinking Water State Revolving Funds. AGC Vice President Kris Young, president and CEO of Miller the Driller, Des Moines, Iowa, testified on July 15 before the House Transportation and Infrastructure Subcommittee on Water and Natural Resources about a recently released GAO report on the creation of a Clean Water Trust Fund. Young cited the precedent for using trust funds to tackle national infrastructure priorities. She also cited several advantages over general-fund financing such as dedicated funding streams that are not subject to the annual appropriations process as well as making it easier to plan and finance long-term infrastructure projects. E-Verify The Dept. of Homeland Security on July 8 announced the administration’s intent to “push ahead with full implementation” of a rule requiring federal contractors to use the E-Verify system to authorize employees to work in the U.S. The E-Verify rule now applies to federal solicitations and contract awards government-wide as of Sept. 8. Contracts and solicitations issued before Sept. 8, 2009, are not covered. AGC will remain involved in discussions on Capitol Hill about the use of E-Verify and will continue to report developments to members. Negotiations are ongoing and it remains to be seen what the final outcome will be on this appropriations bill. Immigration Conventional wisdom says that comprehensive immigration reform will not see floor action this year. In addition, the President has said he does not expect the issue to come up before 2010. However, discussions are under way on Capitol Hill to create a bill, and the administration has reached out to groups to discuss what should be a part of the legislation. Proponents of immigration reform on Capitol Hill want to get legislation introduced so negotiations can at least begin. In addition, some lawmakers are giving more thought to introducing smaller immigration bills instead of focusing only on comprehensive reform. In late August, the White House held a meeting with religious, immigration rights, law enforcement, labor and business groups, including AGC, to learn the viewpoints of various stakeholders. AGC remains active in conversations with the House, the Senate and the administration with regard to items of concern for the construction industry. These issues include discussions on employer enforcement, employment verification, changes to visa programs and the development of any future flow program. Though the economic climate is a difficult one right now for this issue, AGC will remain in the discussion and track developments closely.
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