By a vote of 78-19 the Senate last night approved legislation to extend several Federal programs until March 31, 2010, including Highway Trust Fund spending authority that expired on February 28, 2010. The House previously approved the bill and President Obama has signed it. The bill has been on hold due to objections from Senator Jim Bunning (R-Ky.) over budgetary considerations not related to the highway program. The stalemate caused the furlough of Federal Highway Administration (FHWA) employees and prevented reimbursements to state DOTs for ongoing Federal-aid highway contracts. Some states postponed bid lettings because of the uncertainty over the funding and several direct FHWA projects were shut down. Furloughed workers have been told to report back to work today.Still pending is H.R. 2847, the so-called jobs legislation, which would provide an extension of highway program authorization until December 31, 2010, provide additional revenue to the HTF to keep it solvent through the first quarter of 2011, and remedy 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 "jobs" bill was passed by the Senate last week but concerns by different factions in the House kept the bill from being approved, making the 30 day extension necessary. One issue raised by House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.), related to the distribution of highway funds for the Projects of National Significance Program and Corridors Program, has been resolved. The House may consider the "jobs" bill as early as today.

Congress adjourned for the week without enacting legislation to extend highway and transit program spending authority beyond the February 28, 2010 deadline. As a result, states will not be reimbursed for payments for ongoing contracts starting on Monday and FHWA employees will be furloughed on Tuesday. Since the House will not be back in session until Tuesday and the Senate is not scheduled for a vote until Tuesday afternoon, this stalemate cannot be resolved until late next week at the earliest.Two pending bills were intended to keep this shutdown from occurring but efforts to pass either bill have been stymied. The "Jobs" bill passed by the Senate this week would have extended highway program authorization through the end of the year and provided additional Highway Trust Fund revenue to keep the program solvent. When that bill was sent to the House, it encountered opposition from the fiscally conservative Blue Dog Democrats who raised concerns that the non-highway provisions in the bill violate the House statutory PAYGO budget rules requiring an offset for increased spending. In addition, House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn) asked members to oppose the extension because he objected to the formulas used in the Senate bill to distribute the highway funding. The Senate bill guaranteed that each state receive the same amount of money under the extension as it received in FY 2009. In addition, there was resentment from House members that most of the provisions from the House-passed jobs bill were not included. Since it did not appear likely that the House could pass an extension before February 28, a thirty-day extension was included in a separate bill providing extensions for several other programs also set to expire at midnight on Sunday, which the House adopted. When that bill was brought up in the Senate, Senator Jim Bunning (R-KY) objected to these extensions on budgetary grounds. In order to get past Sen. Bunning's objections, a cloture motion, requiring 60 votes in support, is necessary. This procedure has time requirements that will keep the bill from moving forward for several days. The House could still overcome objections to the "Jobs" bill and pass that.AGC is contacting key Senators and representatives pointing out the devastating impact this shut-down will have on the highway construction industry and urging them to resolve these differences quickly. You are urged to call your Senators and representative with the same request. To be connected to your elected officials, call the US Capitol switchboard at: 202-224-3121.A letter to your members of Congress will be posted to http://www.bipac.net/issue_alert.asp?g=AGC&issue=HTF&parent=AGC.

By a vote of 62-30 the Senate today voted for cloture, a procedural move that allows debate on the "Jobs" legislation to proceed. The vote was largely along party lines with the following Republican Senators joining 58 Democrats in support: Bond (Mo), Brown (Mass), Collins (Me), Snowe (Me), Voinovich (OH). Senator Nelson (Neb) was the lone Democrat voting against. While there are still 30 hours of potential debate on the underlying bill, today's vote was the key, and final passage in the Senate will likely occur on Tuesday. AGC sent numerous alerts in support of the legislation and members across the country responded by urging their Senators to support cloture. AGC followed up visits and correspondence with Senators by sending a Key Vote alert today pointing out the high importance the construction industry placed on today's vote. The bill contains the following provisions: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.Restores highway spending authority that was cut on September 30, 2009 due to a budget recession in SAFETEA-LU.Allow public bodies to convert tax credit bonds to Build America Bonds.Exempts workers hired in 2010 that have been unemployed for at least 60 days from Social Security payroll taxes.Extends 2008 and 2009 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. Following passage by the Senate the bill must go to the House for consideration.

Hours after Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) released a draft "Jobs" bill to address current economic conditions which had bipartisan support, Senate Majority Leader Harry Reid (D-Nev.) offered instead a scaled-down version and announced that the Senate will consider this version of the legislation on February 22, following the week-long President's Day recess.  The Reid "jobs" legislation contains the same provisions related to the highway program as in the Baucus/Grassley bill as follows: - Extends authorization for the highway and transit programs at FY 2009 funding levels though December 31, 2010;- Provides $19.5 billion in revenue to the Highway Trust Fund to keep the program solvent into 2011. This transfer would reimburse the HTF for $19.5 billion in lost interest payments since 1998;- Shifts the cost of motor fuel tax exemptions for state and local governments from the HTF to the general fund.  This would provide ongoing HTF revenue of approximately $1.5 billion each year;- Restores spending authority lost from an $8.7 billion rescission of contract authority contained SAFETEA-LU.The current extension of highway and transit program authorization expires on February 28, and because of federal budget rules it is important that the extension and transfer of funds happen before that deadline. Every state will lose funding if this fix is not approved. Click here to view the impact on your state. This new twist will make meeting this deadline even more difficult. If you have not yet done so, please contact your senators, particularly Republican senators, and tell them to support an extension of the highway and transit program with additional revenue through the end of the year. Inform them that failure to pass the extension and the additional program revenue will have a direct impact on FHWA's ability to reimburse your state DOT for ongoing construction projects and could cause your DOT to cancel scheduled lettings.  You can send a message by calling the Capitol Hill switch board at 1-800-828-0498 and ask for your Senators' offices, or by following this link to AGC's Legislative Action Center.

The California Air Resources Board (CARB) announced that it has postponed the implementation of its off-road equipment rule which was scheduled to go into effect on March 1, 2010 because it has not yet received approval from the US Environmental Protection Agency (EPA) to move ahead with enforcement. In making the announcement, however, CARB agreed with AGC's request to hold a public hearing on the question of whether the off-road regulations should be further modified to account for the down economy and subsequent emissions reductions. AGC has 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. Mike Kennedy, AGC's general counsel, said the following about CARB's action: "AGC appreciates the opportunity to publicly air our concerns and expect Board officials will ultimately agree to significant changes to their off-road diesel rule.  However, yesterday's decision to 'delay' enforcement of the rule until a federal waiver is issued is as legally meaningless as it is economically damaging.  By committing to begin enforcement as soon as the federal government allows, the Board is only acknowledging legal reality, not providing relief."  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 AGC of California and San Diego AGC Chapter in a collective effort to stop the rule or significantly modify it.

President Obama released his Administration's Fiscal year 2011 budget proposal today. For the Federal-aid highway program the budget requests $41.363 billion just slightly more (.6 percent) than the current $41.07billion level. The Administration notes that the highway program expired on September 30, 2009 and repeats its request that authorization be extended through March 2011 to allow time for Congress and the Administration to work on new legislation stating that "surface transportation programs and the system for paying for them must be fundamentally reformed." The budget documents also point out that Highway Trust Fund revenue is insufficient to fund the program at this level and assumes that $20 billion will be transferred from the general fund to cover the revenue short fall.Continuing the Administration's year long emphasis for "livability and sustainability", the budget calls for an allocation of $527 for its multi-agency Partnership for Sustainable Communities, including a request to transfer $200 million in highway program funding for this initiative. The budget requests the creation of an Office of Livable Communities within the Department of Transportation to coordinate efforts between Dot and the Environmental Protection Agency and Department of Housing and Urban Development.  The budget requests $600 million in discretionary funds for grants to state and local governments and transit agencies for projects of National, metropolitan or regional significance.The budget also requests $4 billion to create within the DOT a new National Infrastructure Innovation and Finance Fund. It is proposed that the office will provide grants and credit assistance for a variety of surface transportation projects, including: highway, tunnel, bridge transit, commuter rail, passenger and freight intermodal facilities, passenger rail, Amtrak, airports and ports. The projects are to be of National or regional significance and be valued at $25 million or more. Projects of less than $25 million can be approved in areas with smaller populations. An additional criterion for funds under this proposed program is that the projects increase the environmental sustainability of the transportation network in the region.  Included in the budget is a request for an additional $1 billion in funding for high speed rail. This is to supplement the $8 billion in funds provided (with grant awards announced this week) in the American Recovery and Reinvestment Act (ARRA).For the Federal Transit Administration, the budget requests $10.8 billion in grant funding, also a .06 percent increase over FY 2009. The budget makes several proposals for altering the transit program's structure.Funding for the Federal Aviation Administration's Airport Improvement Program is proposed to be continued at the FY 2009 level of $3.515 billion.

The Congressional Budget Office (CBO) released its January 2010 economic forecast this week, which includes estimates on Highway Trust Fund revenue and balances for the coming year, as well as projections for the next ten years.  CBO estimates that the Highway Account of the Trust Fund will have an end of year balance of about $3 billion -less than one month's spending during summer months.  An end of the year balance this low would mean the Highway Account will be unable to meet obligations in a timely manner again this year without a transfer of funds from the general fund or other revenue source.   CBO estimates that the Mass Transit Account will have an end of year balance of $2.9 billion.   CBO estimates that without further action, the Mass Transit Account will likely have cash flow problems similar to the Highway Account during fiscal year 2011.    If the Highway Trust Fund's balance gets low enough, spending on highway and transit programs would be slowed.  Department of Transportation has indicated that if the fund reached this level, it would reimburse states at a prorated amount in order to maintain a positive balance in the fund. Congress in the past year has made two transfers of revenue to the HTF totaling $15 billion to keep payments to states flowing in a timely fashion.

Highway and Transportation Division Vice Chair Dean Word participated in a rally organized by the Association of Equipment Manufacturers (AEM) and Associated Equipment Distributors (AED) to bring attention to the need for enactment of long term highway authorization legislation with increased funding levels to address national transportation needs and depression-like economic conditions in the construction industry. AEM and AED have held other "Start Us Up" rallies around the country, which included a parade of construction equipment intended to get media coverage. Word talked about the unprecedented high unemployment levels in the construction industry and AGC's most recent economic survey showing few contractors expect a construction turnaround in 2010.  Indeed, 88 percent of construction firms don't expect overall business conditions to improve until at least 2011.

Federal Highway Administrator Victor Mendez has started an initiative called "Every Day Counts" within the Federal Highway Administration (FHWA) to identify ways to shorten the amount of time it typically takes to deliver highway construction projects from conception to completion, which now takes 13 years on average. AGC has been asked to have members participate on one of the panels created to develop recommendations. The Accelerated Project Delivery task force is looking at impediments to project completion following the official "record of decision" point, which happens at the conclusion of the environmental review, public comment and planning stage. Bob Lanham (Williams Brothers Construction), Scott Williams (Hamilton Construction) and Brian Kaub (Granite Construction) represent AGC on the task force and participated in the initial meetings on January 14-15. The group identified a variety of issues that impact design and construction and will formulate recommendations for improvement. A separate task force will look at steps in the environmental/planning phase that can be taken to reduce time for project approval.Highway and Transportation Division Chair Don Weaver (Weaver-Bailey Constructors) represented AGC at a meeting on January 26 of an FHWA Accelerating Technology Deployment team. The team, also part of the Every Day Counts initiative, identified a list of promising technologies that have the potential for improving highway project delivery or functioning. The group looked at a list of 14 technologies and rated the top five to receive emphasis from FHWA to expedite deployment. The five highly rated technologies are: green paving technologies, accelerated bridge construction, adaptive traffic signal control technology, roadway departure prevention and asset management tools.