The Senate approved its version of the FY 2010 transportation appropriations legislation today. The bill provides $42.5 billion for the highway program, a 4.4 percent increase over FY 2009 and transit program funding of $11.1 billion, a 9 percent increase over FY 2009. The bill also provides $3.5 billion for the Airport Improvement Program, the same amount appropriated the past two years. The House previously approved lower amounts for both the highway and transit programs. The Senate bill includes $1.2 billion for high-speed passenger rail improvements-$2.8 billion less than the House bill. A House/Senate conference committee will be convened soon to work out the differences. Action to extend transportation program authorization is necessary before these appropriated funds can be sent to the states.

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Administration (FHWA) has notified state DOTs that, as required by SAFETEA-LU, $8.7 billion in budget authority will be rescinded from their unobligated Federal-aid highway balances on September 30, 2009.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.

Following House and Senate passage of legislation transferring $7 billion of general fund revenue to the Highway Trust Fund, President Obama signed the bill into law (Public Law: 111-046) on August 7, 2009.  The $7 billion dollar transfer allows state transportation departments to receive full reimbursements for federal-aid highway projects through the end of fiscal year 2009 (September 30).When Congress returns in September, they must take action to reauthorize federal highway and transit programs past the September 30 expiration date of SAFETEA-LU.  Congressman Jim Oberstar (D-Minn.), the Chairman of the House Committee on Transportation and Infrastructure, is committed to bringing a six-year surface transportation reauthorization bill to the House floor for a vote prior to the expiration of SAFETEA-LU, while the Senate Environment and Public Works Committee leaders - with the exception of Senator George Voinovich (R-Ohio) - support an 18-month extension of the current authorization.For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org.

By a vote of 79-17 the Senate passed legislation to transfer $7 billion of general fund revenue to the Highway Trust Fund to provide enough revenue to ensure state transportation departments will continue receiving full reimbursements for federal-aid highway projects through September, the end of the current federal fiscal year. The House approved the measure on Wednesday by a vote of 363-68. The bill now goes to the President who is expected to sign it. In the Senate several amendments to the bill were defeated. Most significantly, an amendment offered by Senator Kit Bond (R-MO) that would have repealed a provision in the SAFETEA-LU law, which requires an $8.708 billion rescission of contract authority from the federal-aid highway program, effective on September 30, 2009. The provision is significant in that it will limit the ability of state DOTs to transfer federal funds between program categories and in some states would actually result in loss of federal funds. Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Cal) voiced her support for the Bond amendment but said it should not be included as part of this short term fix. She pledged to include it in authorization legislation later this year. Congress must still take action to extend spending authorization beyond September 30 when SAFETEA-LU expires. That issue will have to be addressed in September following the Congressional recess.

Congress must take action by the end of the week to avert a slowdown in reimbursements to states for on-going highway construction projects. The FHWA has announced a slowdown will happen as soon as the second week of August if additional revenue is not transferred into the Highway Trust Fund. The Administration has projected that the trust fund needs an infusion of $5-7 billion to pay bills through the end of the fiscal year (September 30, 2009) and an additional $10 billion to keep highway and transit funding in FY 2010 at its current level. In addition, spending authorization expires on September 30 and Congress must act on this as well. The Administration proposes an eighteen month extension of spending authority along with a general fund transfer of $20 billion to ensure that the necessary revenue is provided.The House will adjourn for its summer recess on Friday and no legislative proposal has yet been introduced to provide the short term fix. House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) suggested at a hearing last week before a House Ways and Means Subcommittee that only $3 billion be transferred to the trust fund now and that Congress continue to work on a six-year reauthorization bill that solves the short- and long-term funding issues. He believes an 18-month extension will undermine those efforts. The Ways and Means Committee is responsible for finding the revenue to fix the funding shortfall. In the Senate, legislation has begun to move to address the FY 2009 funding problem and a continuation of the program into fiscal year 2010. The Senate Banking and Commerce Committees have joined the Environment and Public Works Committee in approving legislation to extend highway and transit program spending authorization through March 2011. Still to act is the Finance Committee, which must provide the revenue needed to keep the Highway Trust Fund solvent for the next eighteen months. Finance Committee Chairman Max Baucus (D-Mont.) has introduced legislation that would transfer nearly $27 billion from the general fund to the Highway Trust Fund. That legislation, once approved by the committee, will be consolidated with the 18-month authorization provisions and considered by the Senate sometime before its summer recess, which is expected to begin on August 7.

AGC Highway and Transportation Division Chairman Don Weaver, Weaver Bailey Contractors (El Paso, Ark.), presented testimony before the House Ways and Means Committee asking for action to ensure that the Highway Trust Fund has sufficient revenue to reimburse states for on-going construction contracts through the end of fiscal year 2009 and into 2010. Weaver also pointed out the need to enact a six-year transportation reauthorization measure and to provide sufficient revenue to address the nation's growing transportation infrastructure deficit. Weaver's testimony recommended that the federal highway user fee be increased by 18 cents to return the purchasing power that has been lost due to inflation in construction materials since the fee last increased in 1993. AGC's testimony also called for creation of a federal commission to set and raise highway user fee rates in the future and called for increased use of tolling, private funding and other revenue sources to supplement user fees. "Our highways are crowded and crumbling while our country is growing and demanding," he said, "Increased investment is necessary."At the hearing, the U.S. Chamber of Commerce, American Trucking Association and American Automobile Association also testified in support of a federal motor fuels tax increase to address the nation's growing transportation problems. The bipartisan leadership of the House Transportation and Infrastructure Committee also called for increased revenue to meet these needs.

The Transportation Construction Coalition (TCC), a group of nearly 30 transportation organizations, placed an advertisement in four Capitol Hill publications. The ad, developed by AGC and its TCC co-chair, the American Road & Transportation Builders Association, calls on Congress to pass a six-year surface transportation investment bill immediately.

The premier national event for contractors and related businesses involved in every aspect of highway and utility construction has been scheduled for November 12-14, 2009 at the PGA National Resort in Palm Gardens, Florida. Attendees will hear about and discuss issues and trends in these markets and receive  updates on legislation and legal decisions that affect the highway and utility markets, including the re-authorization of SAFETEA-LU and the creation of a Clean Water Trust Fund. Updates on the Recovery Act and pending regulatory action are also on the agenda. New to this conference, this year we will be offering separate Utility and Highway tracks that will converge with issues that affect both types of contractors. Contractors interested in virtual construction and its growing place in the market will learn how horizontal BIM works and how to integrate it with construction equipment. In addition, attendees will also receive a briefing on the California Air resources Board (CARB) rule and other diesel retrofit requirements and opportunities. Contractors interested in the opportunities presented by the increased interest by the Administration on High-Speed Rail will also find something. The hotel is rate in only $179.00/night, which includes the resort fee and meeting registration is $200. The cutoff date for hotel reservation is Monday, October 19, so don't miss out on your chance to attend. Details will be posted to www.agc.org.