2012 Federal Contractor Conference Federal Legislative Issues

Hundreds of federal construction contractors will descend upon Washington, D.C. next week for AGC’s 50th Federal Contractors Conference with more than 20 federal agencies and a handful of congressional members in attendance. From a legislative standpoint, their timing could not be better. Congress will reconvene after a two week Easter recess and find a number of key construction industry’s legislative priorities on their agenda. Among the issues AGC contractors will learn about and visit Capitol Hill offices concerning are: Small Business Contracting Reforms The House Small Business Committee passed a number of small business federal contracting reform bills out of committee on March 22. While one of these bills does address construction contracting bundling, most of these bills do nothing to improve small business contracting for the construction industry. Specifically, the federal government has long had issues meeting its small business contracting procurement goals. Despite this fact, H.R. 3850, the Government Efficiency through Small Business Contracting Act of 2012, would raise the small business contacting goal from 23 to 25 percent of the total value of all prime contract awards. AGC members will tell their federal representative and senators that Congress should reform the current system to meet the existing goals and truly benefit small business; not raise the goal to an even higher level.  AGC members, additionally, will be voicing their support for H.R. 4081, the Contractor Opportunity Protection Act of 2012. This bill would help reduce contract bundling to increase competition, allowing small businesses to have a better opportunity to participate in the federal procurement market. Estate Tax on Family Owned Businesses In 2001, Congress attempted to repeal the estate tax and its harmful effects on family-owned businesses. Unfortunately, the 2001 law created great uncertainty about the future taxation of construction business owners considering a succession plan. Currently, the estate tax rate is 35 percent with a tax exemption of $5 million.  The estate tax is scheduled to be reinstated in 2013 at the higher pre-2001 level (55% top rate and a credit of $1 million). AGC supports permanent reform at the lowest possible rates and highest possible exemption levels (indexed to inflation) to alleviate business uncertainty and allow contractors to use resources that might otherwise go towards estate preparation or to pay the tax on growing their businesses for future generations.  Contractors will descend on Capitol Hill to urge their members of the House to Cosponsor H.R.1259, the Death Tax Repeal Permanency Act of 2011 and the Senate counterpart, S. 2242, the Death Tax Repeal Permanency Act of 2012. Wetlands In April 2011, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) released draft guidance to clarify jurisdiction of waters under the Clean Water Act.  EPA and USACE have now submitted a final version of this guidance to the Office of Management and Budget for federal interagency review. The AGC-opposed Guidance significantly expands the scope of waters to be regulated by EPA and USACE, despite the United States Supreme Court decisions that narrowed the agencies’ authority.  The guidance is inconsistent not only with the procedural requirements of the Administrative Procedure Act but also with the scope of the agencies’ authority under the Clean Water Act and Commerce Clause of the U.S. Constitution.  AGC is asking our members to tell Congress it has a constitutional obligation to check executive branch overreach and ask  their Senators to co-sponsor and support S. 2245 the “Preserve the Waters of the United States Act.” Federal Facility Infrastructure Investment & “Civilian BRAC” With the economy remaining in a “slow-growth” pattern and a complex federal budget environment, federal facility infrastructure investment accounts face a difficult appropriations road ahead. However, federal construction contractors have legislative reason for hope. Earlier this year, the House of Representatives passed the Civilian Property Realignment Act, H.R. 1734, with bipartisan support. This bill, introduced by Rep. Jeff Denham (R-Calf.), would charge an independent commission to select at least five federal government properties worth $500 million or more for sale within the first 180 days after it is created. The commission’s efforts could raise at least $15 billion from property sales, leading to significant commercial construction redevelopment opportunities. The Senate is still considering its version of the bill. During the Tuesday Congressional Luncheon, conference attendees will hear from Rep. Jeff Denham on this issue and his bill’s progress, as it makes its way through the legislative process. AGC contractors will also push for the Senate’s passage of the bill, S. 2232, introduced by Sen. Scott Brown (R-Mass.) when they meet with their senators during Wednesday’s congressional office visits. Military Construction and the Budget Control Act’s Sequestration Process As a result of last summer’s debt-ceiling deal, Congress enacted the Budget Control Act that includes $1.2 trillion in automatic cuts known as “sequestration,” which will take place in 2013. The cuts will come from defense ($450B), non-defense ($300B) and entitlement programs ($170B) starting in 2013. Many defense hawks in Congress continue to work to prevent this significant defense spending cut. However, if their efforts fail, which programs within the defense budget would be cut remain a question. House Armed Services Committee member Rep. Chris Gibson will discuss this process and address its potential impact on military construction, among other construction investment accounts, on Wednesday, April 18 during the conference’s legislative and economic briefing. Maritime Infrastructure Investment: Fully Funding the Harbor Maintenance Trust Fund Maritime infrastructure investment is a key component of remaining a globally competitive economy. However, Congress has failed to fully fund harbor maintenance projects since 2002. The problem hasn’t been for a lack of resources. Rather, revenues generated from the Harbor Maintenance Tax (HMT) that pay for such improvement projects have been diverted to a host of other, non-related federal program related needs. The House of Representatives is poised consider passage of the Realize America’s Maritime Promise Act, introduced by Rep. Charles W. Boustany (R-La.), which has the bipartisan support of 187 cosponsors. This bill would fully invest the $1.3 to $1.6 billion generated annually from the HMT in harbor maintenance projects. Annual expenditures for such projects have averaged less than $800 million over the past five years. Meanwhile, the Senate version of the bill, S.412, the Harbor Maintenance Act of 2011, introduced by Sen. Carl Levin (D-Mich.) has 35 bipartisan cosponsors. Though the bill itself has not seen much movement in the chamber, a provision in the Senate’s surface transportation reauthorization bill allows for its consideration for inclusion during conference discussions if the House passes a transportation bill. Congressional Review Act - Stop the NLRB’s Attempt at Backdoor Card Check In December 2011 the NLRB issued a final rule on union organizing elections. The critics dubbed the rule the “quickie” or “ambush” election rule because it would effectively expedite the union election process, limit employers’ opportunity to communicate with workers about union representation and deprive employees of the ability to make a fully informed decision. The rule will become effective April 30, 2012 without congressional action.  AGC supports the passage of S.J. Res 36 and H.J. Res 103 which nullify the rule and stop it from being implemented. A vote on the resolution could occur as early as next week in the Senate. Transportation Reauthorization With transportation authorization already nearly 940 days late and the highway and transit programs operating under the ninth short term extension- this one until June 30- now is the time for Congress to get serious and pass a bill. These short term extensions undermine states from addressing their transportation needs and impact contractors decisions about keeping their work force on the payroll and purchasing new equipment. That is the message that will be delivered by AGC members participating in the federal Contractors Conference next week. AGC members will tell their Congressional delegation that they should avoid the need to pass any more short-term extensions by completing action on a longer term authorization now. In particular it will be emphasized that the House needs to move expeditiously to complete action on a multi-year bill that will allow a House–Senate Conference Committee to begin work on the final legislation. Since neither the House nor the Senate bills address the long-term viability of the Highway Trust Fund and in particular the need for an increase in the dedicated revenue source, AGC members will also call for point out that, following completion of work on the highway and transit reform bill, Congress must immediately begin to address the long-term future of the federal transportation programs, and in particular address revenue options that will provide the resources necessary to sustain the Highway Trust Fund. Current OMB projections indicate that the Highway Trust Fund has insufficient resources to support current funding levels beyond Fiscal Year 2013. Several infusions of revenue from the general fund were necessary to keep the program operating over the past two years. Additional HTF revenue is necessary to maintain this year’s funding level beyond FY 2013. For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org.