House T&I Subcommittee on Highways and Transit held a hearing this week on "Using Innovative Financing to Deliver Highway and Transit Projects." Witnesses agreed on the need to continue the basic user-fee program to provide the bulk of highway trust fund revenues, and on the need to continue to utilize existing "innovative" approaches to stretch existing transportation dollars. Witnesses discussed successes with various existing loan and credit programs such as Garvee bonds and TIFIA loans and discussed the Administration's proposal for a National Infrastructure Innovation and Finance Fund (NIIFF).  Subcommittee Chairman Peter DeFazio (D-Ore.) wondered why the administration is pushing a new approach when the TIFIA program is very popular and over-subscribed. No new ideas for increasing Highway trust Fund revenue were out forth.

AGC along with other transportation industry groups sent a letter to Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT) with a clear message that the climate and energy legislation they are currently drafting must place any revenue collected from a "carbon tax" on gasoline into the Highway Trust Fund.  It is widely anticipated that their bill will include such a tax that could be passed on to drivers when they purchase motor fuels. AGC will continue to work with the Senators to ensure that any new fees placed on transportation fuels be dedicated to the Highway Trust Fund to improve U.S. highway and public transportation systems and to congestion reduction. The letter also noted that diverting fuel tax revenue to non-transportation purposes would severely hamper efforts to meet the investment goals proposed in the next multi-year surface transportation reauthorization bill.

The US Environmental Protection Agency has scheduled a hearing for April 14 in Washington to consider the California Air Resources Board's (CARB) request for a waiver to allow it to begin enforcing its off-road diesel equipment rule. The rule was originally scheduled to go into effect on March 1, 2010 but EPA never granted approval to CARB to move ahead with enforcement. AGC is preparing expert witness testimony asking EPA to deny California's request.This EPA action follows closely on the heels of a public hearing held by CARB on March 11 on the question of whether the off-road regulations should be further modified to account for the down economy and subsequent emissions reductions. AGC presented CARB with substantial empirical data demonstrating that the downturn in California's economic conditions and the resulting drop in construction activity have made the rule unnecessary. AGC has pointed out that California's own inventory data makes clear that off-road equipment operators will be well under the state's aggressive diesel emissions limits for years to come without this rule.  AGC will make similar recommendations at the upcoming EPA hearing. 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 grants unique authority to California to adopt its own clean air rules, including an off road diesel emissions rule. Other states are prohibited from developing their own regulations but may adopt California's rules once EPA has approved them.  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 AGC of California and San Diego AGC Chapter in a collective effort to stop the rule or significantly modify it.

The Senate this week 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 bill would also allow six airports (to be determined in the future) to raise the passenger facility charge (PFC) on airline flights from its current permissible level of $4.50 to $7.00. The House passed a four year authorization in July 2009.  The House bill includes a total of $16.2 billion for AIP grant funding and also 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 Senate bill will now be sent to the House where it can be accepted as is, amended and sent back to the Senate, or, the most likely outcome, a conference committee would be established to work out the differences in the two bills. The most recent multi-year authorization of the FAA expired on September 30, 2007. The programs have been operating under a series of short-term extensions, now totaling eleven, since that time.  The current short term extension expires on March 31 and Congress will be in recess for the Easter/Passover break starting next week. Last week, the House passed a bill (H.R. 4853) to extend FAA authorization until July 31, 2010. H.R. 4853 also makes a change in the recently enacted surface transportation extension included in the "Jobs" bill to change the way that $745 million in highway funding under the Projects of National and Regional Significance and Corridor programs will be apportioned to states. This provision enacts an agreement between House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) and Senate Majority Leader Harry Reid (D-Nev.) that allowed the "Jobs" bill to move forward in the House.

National Work Zone Awareness week is scheduled for April 19 - 23, 2010, and the theme is  "Work Zones Need Your Undivided Attention." As in the past, the purpose of the week is to bring to the attention of motorists, contractors, construction workers and the media the special dangers that are present in highway work zones. AGC of America's Highway and Transportation Division Chairman Dean Word will participate in a media event in New York City on April 19 to help focus national media attention on the issues surrounding work zone safety. AGC Chapters will also participate in state and local events to help raise awareness.

The 2010 AGC Federal Contractors Conference will be held April 26-29, 2010, at The Mayflower Hotel in Washington, D.C. This meeting is the only national event where contractors and federal agency personnel can meet in a collaborative forum to review federal construction contracting issues and trends from around the country. This year, AGC's Federal Contractors Conference will include a track with Department of Transportation agencies, including Federal Highway Administration, Federal Aviation Administration, Federal Transit Administration and Federal Railroad Administration. This is an opportunity to hear from and discuss with the top leaders in these Federal agencies about issues that impact construction in your market. To learn more about the conference, download the conference brochure and register, visit www.agc.org/fedcon.

While Congress has passed legislation to keep the highway and transit programs operating through the end of the year and provided funds to keep the Highway Trust Fund solvent through the first quarter of 2011, much work still needs to be done. Senators and representatives need to understand the importance to your state's transportation program, jobs and long term investment of enacting long-term well-funded highway and transit reauthorization legislation. The Transportation Construction Coalition has scheduled a Washington Fly-in for May 25-26, 2010 at the Capitol Hill Hyatt Regency to deliver the message: "Transportation Creates Jobs While Building the Future." The Fly-in starts on May 25 with an AGC caucus at 11:00 am followed by a legislative briefing at 2:30 pm. CNN political commentator William Schneider will join key Congressional leaders in discussing the politics of getting the highway and transit bill passed. Schneider will also discuss the broad political landscape and upcoming elections. More information, including registration and hotel reservations, is available here.  http://www.agc.org/galleries/events/AGC_DCFly10HI_2.pdf

On March 18, 2010 the Senate gave final approval to the “Jobs” legislation and President Obama has signed it. 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.

The House today approved the Senate passed "jobs" bill by a vote 217 to 201, with 211 Democrats and 6 Republicans voting in support.  Before adoption, the bill was amended to address the budgetary concerns of the fiscally conservative "Blue Dog" Democrats who wanted to assure that the bill was deficit neutral. Also included in the amendment is language extending, but not altering, authority for the Department of Transportation's Disadvantaged Business Enterprise (DBE) program. The bill now goes back to the Senate for its consideration. There is no indication as to when the Senate will address the amended bill.The bill provides an extension of highway program authorization until December 31, 2010, provides additional revenue to the HTF to keep it solvent through the first quarter of 2011, and remedies an $8.7 billion rescission of highway spending authority included in the SAFETEA-LU law. Other construction friendly provisions in the bill include an extension of Build America Bonds and accelerated equipment expensing. The program is operating under authorization provided in a 30 day extension that was passed by the Senate on Tuesday and signed by the President yesterday.

This week, Tom Foss, President of Griffith Company, Brea, California presented AGC testimony before the Senate Environment and Public Works (EPW) Committee on the importance of transportation investments to the National economy and jobs. Foss emphasized that the construction industry, like other businesses relay on a well functioning transportation system for delivery of materials and products to job sites and, therefore, called for increased investment to improve system functionality. Foss pointed out that unemployment in the construction industry is currently running at over 24 percent and that additional highway and transportation investment is needed to remedy this situation. AGC's testimony pointed out that transportation funding in the stimulus legislation has saved construction jobs but that more funding was needed. Foss also called for enactment of a long term SAFETEA-LU reauthorization with increased funding to bring long term economic growth and certainty to the highway construction market. EPW Committee Chair Barbara Boxer (D-Cal) said she is committed to getting a six year highway bill completed this year. She called the hearing the first step in accomplishing this goal.