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Court Action Muddies Obama Admin. Waters of the U.S. Rule for Contractors

‘Hold’ on Controversial Rule Expected to be Lifted
A Jan. 22 U.S. Supreme Court procedural ruling involving the Obama Administration’s 2015 Waters of the United States (WOTUS) will lift an earlier appeals court decision to put in place a nationwide freeze of that rule. At this moment, implementation and enforcement of the 2015 rule—which expands federal jurisdiction involving wetlands—appears imminent in most states. However, AGC awaits word on when an appeals court will officially lift its nationwide hold on the rule but, until that happens, nothing is changed. (Read more in AGC’s “frequently asked questions” document).

Irrespective of when the appellate court lifts its hold, thirteen states – the states that were parties in a case before the U.S. District Court for the District of North Dakota – will remain shielded from the 2015 WOTUS rule in the short term. Those states are: Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.
The timing of the decision is unfortunate as the administration is still working to repeal and replace the 2015 rule. The administration is expected shortly to finalize a rule that would delay the implementation date of the 2015 WOTUS rule by two years, i.e., until 2020. It is not certain whether the administration will finalize that rule in time to forestall implementation once the appellate court’s nationwide stay is lifted. This two year delays is intended to prevent confusion over implementation that industry currently faces and to allow the agencies more time to finalize its repeal and replace efforts.
For more information, contact Melinda Tomaino at [email protected] or Leah Pilconis at [email protected].

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Section 232 Report on Foreign Steel Imports Reaches Trump’s Desk

Could Have Implications on Construction Steel Prices
On Jan. 11, Commerce Secretary Wilbur Ross delivered his “Section 232” report on the national security threat posed by foreign steel mill product imports to the president. Section 232 of the Trade Expansion Act of 1962 allows the president to utilize his “statutory authority to adjust imports” without Congress’ approval if a government-led inquiry yields sufficient evidence of a threat. President Trump now has 90 days to review the Commerce Department’s findings and recommend remedies, likely in the form of tariffs, quotas, or some sort of hybrid package. Should the administration act on the report, the construction industry may see an increase in steel prices.
Section 232 is unique in that damage is not calculated based upon import volume. This is particularly important because China is the ostensible target of this investigation, despite a dramatic decrease in Chinese steel imports. And, while China is the biggest net exporter of steel – and has contributed mightily to the global glut – Canada and other European allies are, in fact, the United States’ largest sources of foreign steel.
President Trump is keen on shielding domestic steelmakers from unfair imports and few doubt that the report will fail to reinforce the administration’s view that national security is currently being compromised. In determining a response, President Trump will have to weigh the timing of any announcement, as well as the scope of a response—sweeping trade restrictions on foreign steel imports or more precisely targeted remedies.
AGC will continue to monitor the situation and update its members as more information becomes available.
For more information, contact Collin Janich at [email protected].

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Tax Reform’s Impact on Your Construction Business & Market

Complimentary AGC WebEd: Jan. 30 from 2:00 to 3:00 PM ET
Register today for this complimentary AGC webinar. Congress recently passed the most far-reaching tax reform legislation since 1986. No matter what your construction market—public or private—or construction firm—C-corporation, S-corporation, LLC, LLP, or partnership—the new tax reform law will have an impact on you.
During this webinar, you will hear tax and accounting firm CBIZ’s Cord Armstrong—a CPA and leader in the firm’s National Construction Industry Practice Group—AGC’s lead infrastructure and tax policy experts—Sean O’Neill and Matt Turkstra, respectively— and AGC Chief Economist Ken Simonson discuss:

  • The impact of the new law on your construction business—no matter the type, C-corp, S-corp, LLC, partnership or so forth;

  • Things your business should consider before converting to a C-corp, such as the 20 percent pass-through deduction and how it works;

  • Changes to tax incentives for public and private construction, including but not limited to private activity bonds and the historic tax credit;

  • Ambiguities in the law to be aware of and the chances of this Congress enacting “technical corrections” to address them;

  • What’s next for the Department of the Treasury and Internal Revenue Service when it comes to issuing guidance and regulations to help you understand how to comply; and

  • How AGC advocated for your construction business throughout this process and continues to do so.
For more information, click here or contact Matt Turkstra at [email protected].

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U.S. Chamber Calls for 25 Cent Gas Tax Increase

AGC CEO Addresses Group
On Jan. 18, the U.S. Chamber of Commerce called for increasing the federal gas tax by 25 cents as part of its recommendations for an infrastructure package announced at its “America’s Infrastructure Summit: Time to Modernize” event.  In addition to increasing the gas tax, the Chamber’s recommendations include leveraging more public and private resources, streamlining the permitting process, and expanding the workforce to build the infrastructure. AGC CEO Steve Sandherr was asked to participate in the event and shared the association’s efforts to address the workforce challenges facing the construction industry.
AGC has been sharing a similar plan – An Agenda to Rebuild Our Infrastructure & Our Workforce – with Congress and the administration and looks forward to working with the U.S. Chamber and other stakeholders to ensure an infrastructure plan is enacted that provides increased funding and financing, streamlines the environmental permitting process and helps address the construction industry’s workforce challenges.
For more information, contact Sean O’Neill at [email protected].

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AGC Testifies in Support of NEPA/404 Permitting Merger

House Transportation Committee Considers Environmental Streamlining
On Jan. 18, AGC’s Senior Counsel on Environmental Law and Policy Leah Pilconis testified before the House Transportation and Infrastructure Committee in support of further federal environmental review and permit streamlining measures. Among AGC’s recommendations, the association called on Congress to merge the National Environmental Policy Act review and Clean Water Act Section 404 permit processes to reduce duplication and delay in the federal environmental approval process.  U.S. Army Corps of Engineers Deputy Commanding General for Civil and Emergency Operations Major General Ed Jackson and Director of Civil Works James Dalton, among others, also testified on the panel that included AGC.
For more information, contact Leah Pilconis at [email protected].

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AGC Urges Congress to Fund the Government

What Contractors Should Do in the Event of a Shutdown
On Jan. 18, AGC urged Congress to pass a short-term funding bill that would avoid a government shutdown and provide temporary relief from several Obamacare taxes impacting construction employers. AGC has compiled resources – What Contractors Should Know in the Event the Government Shuts Down – to help your company deal with the consequences of a government shutdown.
As noted, the funding bill would additionally provide essential relief from a number of Obamacare taxes that would otherwise detrimentally impact construction contractors, especially small businesses. Specifically, the bill delays until 2022 the Cadillac tax, a 40 percent excise tax on employer-sponsored health coverage whose benefits exceed specific thresholds. The legislation would also provide a one year, 2019 moratorium on the health insurance tax that will increase the cost of health insurance for small business employers, the majority of AGC’s construction contractor membership. 
For more information, contact Jordan Howard at [email protected].

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AGC Financial Issues Committee Winter Meeting Recap

On Jan. 8-9, nearly 40 member company CFO’s and other senior accounting and tax professionals attended the AGC Financial Issues Committee (FIC) Winter Meeting in San Diego, California. Committee members discussed the recently passed tax reform legislation and how it impacts the construction industry and its priorities.
The group also discussed the use of Public Private Partnerships (P3s) with Mike Lucki of Lucki Advisors; received an update on the implementation of new accounting standards from Susan Cosper of the Financial Accounting Standards Board (FASB); and heard from AGC Chief Economist Ken Simonson about the economic outlook for construction.
The FIC Summer Meeting will be held June 7-8 at the Madison Hotel in Washington, DC.  Meeting and hotel information will be circulated in the coming months.
For more information, contact Matt Turkstra at[email protected].

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Multiemployer Pension Legislation Proposal Unveiled

On Jan. 9, AGC participated in a media rollout of the Give Retirement Options to Workers (GROW) Act with the future bill’s sponsors, the National Coordinating Committee for Multiemployer Plans (NCCMP) and North America's Building Trades Unions (NABTU). More commonly known as “composite plans,” the GROW Act has long been an AGC priority, and legislation could be formally unveiled in the coming weeks.
Initially proposed in the NCCMPs Solutions not Bailouts, the composite plan concept incorporates the best features of defined benefit plans and defined contribution plans. These composite plans would offer voluntary options to share risks, providing funding stability, providing lifetime income to participants, and limiting employer obligations to negotiated contributions only.
AGC of America CEO Stephen Sandherr and Sean McGarvey, President of NABTU, weighed in on composite plans in an op-ed published in The Hill. More information can be found on the Save Our Futures website, and AGC is calling on members to send letters of support to their legislators via the AGC Legislative Action Center.
For more information, contact Jim Young at [email protected] or (202) 547-0133.

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DOL Proposes New Rules Expanding Association Health Plans Options

On Jan. 4, following Presidential Executive Order (EO) 13813, the U.S. Department of Labor (DOL) announced its plan to expand access to healthcare through small business health plans. The proposal could grant small employers greater flexibility to join with groups or associations to offer insured health coverage in the large group market at more favorable prices and with less restrictive requirements. The impact state laws might have on this remains unclear, especially for plans that are not fully insured and generally remain subject to state insurance laws.
EO 13813, “Promoting Healthcare Choice and Competition Across the United States,” directed the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury to develop rules to expand association health plans (AHPs), short-term limited duration insurance, and health reimbursement arrangements (HRAs).
The DOL’s proposed rule pertains to AHPs only by modifying the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA) regarding entities (AHPs) that could sponsor group health coverage. This change would allow employers to band together to offer health coverage if they are either: “(1) in the same trade, industry, line of business, or profession; or (2) have a principal place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area (even if the metropolitan area includes more than one State).” The proposed rule would also allow working business owners, such as sole proprietors and other self-employed individuals, to act as employers for purposes of participating in an AHP, and as employees of their businesses to be covered by the group or association’s health plan.
Comments are due by March 6, 2018, and AGC will provide input to the DOL, as well as notify members of developments.
For more information, contact Jim Young at [email protected] or 202-547-0133 or Claiborne Guy at [email protected] or 703-837-5382.

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AGC Disappointed in Administration’s Decision on Legal Immigration Status for Some Construction Workers

his week, the U.S. Department of Homeland Security announced it was ending Temporary Protected Status (TPS) designations for individuals from El Salvador, allowing them 18 months to alter their immigration status or face deportation. AGC previously joined other construction organizations in encouraging Congress to use its authority to take legislative action and ensure TPS holders can continue to work legally in the country.
Granted to individuals fleeing armed conflict, environmental disasters, or other extraordinary circumstances, the TPS program is a category of legal status that confers work authorization in the United States. The system has existed for decades and involves strong vetting and biometrics.
While El Salvador is the latest country to come under the Administration’s scrutiny of the program, the program itself covers over 300,000 individuals within the United States, 50,000 of whom work in the construction industry. AGC is concerned that ending the legal work status for 50,000 construction workers nationwide will exacerbate the industry’s growing workforce shortage.
For more information, contact Jim Young at [email protected] or (202) 547-0133.

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