Congress has taken no action this week to repeal an $8.7 billion rescission of federal highway funds set to hit the states on September 30. While for some states this will not have a direct effect, in many states the rescission will result in an actual cut in funding for highway construction projects. 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.

By a vote of 335 to 85 the House today voted to support a three month extension of authorization for the highway and transit programs which expire on September 30, 2009. The vote became embroiled in partisan gamesmanship when the Republican leadership opposed the bill being considered under a parliamentary procedure that required a two-thirds majority for passage but did not allow for amendments. House Transportation and Infrastructure (T&I) Committee ranking republican John Mica (R-FL) said during the debate that the Republican leadership wanted the opportunity to offer an amendment to indicate opposition to increasing the federal gas tax as part of the reauthorization effort. On the final vote 87 republicans voted against the extension with no democrats voting in opposition. House T&I Committee Chairman Jim Oberstar (D-MN) continues to champion the effort to enact a six year reauthorization measure with significantly increased funding. He favors limiting the length of an extension to three months so that Congress will continue to make progress on passage of a long term bill. The Obama Administration and key members of the Senate are pushing for an eighteen month extension to delay debate on the legislation and how to provide the necessary revenue until 2011. The Senate will consider its version of the extension later this week or early next week.AGC and our Transportation Construction Coalition and American for Transportation Mobility coalition partners mobilized in advance of the vote by contacting republican members seeking their support for the extension. AGC contacted House members and pointed out the need for the extension to ensure that there is no disruption in the program while work continues on a six year measure. AGC pointed out that unemployment in the construction industry is at 16.5 percent, double the overall unemployment rate and that a long term and significantly increased funding is needed to not only meet the nation's transportation needs but for contractors to make decisions about hiring and training employees and investing in new equipment.

House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) plans to limit the length of an extension of highway and transit program spending authorization in order to press for a multi-year transportation authorization bill. It is unclear at this time how long an extension Chairman Oberstar will support. SAFETEA-LU expires on September 30, and Congress must take action to allow the programs to continue uninterrupted.Prior to its summer recess, Congress passed legislation to transfer $7 billion into the Highway Trust Fund (HTF) to ensure that there would be no slow down in reimbursements to states for ongoing construction projects. Congressional Budget Office projections indicate that HTF revenue, coupled with the general fund transfer, is sufficient to keep the trust fund solvent for several more months.The Senate is expected to soon bring up legislation reported from Committee prior to the summer recess to extend highway and transit authorization for 18 months until March 2011. The Senate intends to include in the authorization extension an addition to a general fund transfer to ensure the HTF remains solvent through March 2011. Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) indicated that she intends to continue drafting a multi-year bill during this extension. An amendment to limit the extension in the Senate to less than 18 months is expected.The Obama Administration has called for an 18-month extension for the program, coupled with an additional infusion of general fund revenue to keep the programs at a steady funding level. The president does not appear to be ready to address a long-term program authorization at this time.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 there is no disruption in program funding in the interim.For more information, contact Brian Deery at (703) 837-5319 or deeryb@agc.org.

The Federal Highway Administration (FHWA) has issued guidance http://www.fhwa.dot.gov/economicrecovery/guidancedexeccomp.html to states clarifying that contractors working on federal-aid highway contracts funded by the American Recovery and Reinvestment Act (ARRA) are not required to report the compensation of their five mostly highly compensated officers. FHWA issued the guidance to clear up confusion about what is required to be reported. The Office of Management and Budget (OMB), which is charged with issuing guidance for federally assisted contracts under this program, called for recipients and subrecipients of ARRA funds to report the total annual compensation of the five most highly compensated officers of the company. AGC questioned whether this was intended to apply to contractors working on federally-assisted projects funded with ARRA funds. As a result, FHWA asked OMB to clarify the application of these provisions. OMB advised FHWA that for federally-assisted projects, the reporting requirements on executive compensation apply only to direct recipients and their subrecipients. The executive compensation requirements do not apply to contractors working for either the recipient of Federal financial assistance or its subrecipient. Contractors working on direct contracts with the Federal government, however,  are covered under guidance issued by the Federal Acquisition Regulatory (FAR) Council which calls for reporting of this information.

Congressman Earl Blumenauer (D-OR) is the latest speaker to confirm participation at AGC's Highway and Utility Contractor's Issues Meeting scheduled for November 12-14, 2009 at the PGA National Resort in Palm Gardens, Florida. Rep. Blumenauer is a member of the House Ways and Means Committee and has been a leading advocate for increasing Highway Trust Fund revenue to address transportation needs and creation of a Clean Water trust Fund to address water infrastructure needs and is also working on legislation to provide tax credits for contractors to replace their off road diesel powered vehicles to meet clean air requirements. Rep. Blumenauer will discuss the outlook for highway reauthorization and increased infrastructure funding. Also participating will be:A key Federal Railroad Administration representative will present the Administration's high speed rail initiative and the construction opportunities that will result from this investment.A forum on the use of computer modeling (BIM/virtual design) for highway and water projects will include representatives from software companies Bentley and Autodesk and will feature a jobsite presentation from an experienced contractor. Caterpillar will have a representative to describe the latest developments for integrating construction equipment into the BIM model.Attorney John Mullen will report on the top legal decisions of the year that may impact your business.State DOT representatives will discuss the use of contractor performance measures for prequalification, latest design-build developments including a financing option, alternate bid items for selecting concrete or asphalt pavements, performance specifications, value engineering/ practical design and recycled materials in concrete and asphalt.How will Green Construction initiatives impact highway construction projects?Washington update on legislation currently being addressed in Congress. Additional information including schedule, hotel and registration is available here. http://www.agc.org/cs/event_details?eventId=1653

With SAFETEA-LU authorization scheduled to expire on September 30, action is necessary to keep the highway and transit programs operating. House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-MN) announced his intention to move a 3 month extension this week out of Committee with floor consideration next week. Chairman Oberstar opposes a longer extension because he believes it will undermine efforts to enact a six year reauthorization bill. The Senate is preparing to bring to the floor legislation to extend the programs for 18 months until March 2011. Senate committees have already passed the needed legislation, including the Finance Committee which included a $20 billion transfer from the general fund to keep the Highway Trust Fund solvent for the eighteen months. The Senate is supporting the Administration's request to hold off on a multi-year extension until 2011.

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.