This week, AGC and a coalition of organizations representing small businesses called on Congress to pass HIT relief for 2018 before January. The Health Insurance Tax (HIT) is one of the largest taxes imposed by the Affordable Care Act on the fully-insured health care market – the market that serves most small business. The tax was suspended for 2017; however, absent congressional action, the HIT is projected to return in 2018 at a rate of over $14 billion, which will ultimately be paid for by small businesses in the form of increased health care premiums.
For more information, contact Jim Young at [email protected] or (202) 547-0133.

This week, AGC joined industry allies in urging Congress to repeal the Cadillac tax in any end-of-year package.The “Cadillac Tax” originated in the Affordable Care Act and is a 40 percent excise tax on employer-sponsored health coverage whose benefits exceed specific thresholds. In 2015, the tax was delayed for two years, from 2018 to 2020. Employers are already beginning to feel the impact of the 2020 tax as they look at future health care benefits and restructuring those benefits to avoid the tax.
For more information, contact Jim Young at [email protected] or (202) 547-0133.

On Dec. 13, the House and Senate Republican conferees for H.R. 1, the Tax Cuts and Jobs Act of 2017, reached an agreement to resolve the differences between the two versions of the tax reform legislation. Last week, AGC sent a letter to the House and Senate negotiators outlining the construction industry’s priorities for the conference committee. AGC also worked with Senator Inhofe (R-Okla.) to ensure that trusts could access the pass-through business deduction, which was initially excluded in the Senate legislation. Based on comments made by multiple Senators, this effort is believed to be successful.
While no information about the agreement has been officially released—as of publication—press reports indicate that the broad outline of the agreement is as follows:

• Cut the corporate rate to 21 percent from 35 percent beginning in 2018;


• Cut the top individual rate to 37 percent for the highest earners, down from 39.6 percent;


• Provide a 20 percent deduction on pass-through business income, and extend that break to trusts as well as individuals;


• Repeal the Corporate Alternative Minimum Tax;


• Cap the mortgage interest deduction to loans less than $750,000; and


• Limit combined deductions for state and local income taxes and property taxes to $10,000.

There are still many unanswered questions about the agreement, including what happens to the Individual Alternative Minimum Tax (AMT), Private Activity Bonds (PABs), and the “small contractor exemption” from percentage of completion method of accounting, which could have a significant impact on construction businesses.  Press reports also indicate that the final conference report will be filed on Friday, setting up a vote on final passage next week.
As the final details of the conference report are worked out over the next two days, AGC will continue to engage with policy makers to ensure that construction industry priorities are considered in the final bill.
For more information, contact Matthew Turkstra at [email protected] or (202) 547-4733.

Jan. 10-12 in Long Beach, Calif.
The 2018 Winter Safety & Health Conference will take place Jan. 10-12, 2018 at the Hilton in Long Beach, California. Join more than 250 industry professionals and participate in the development of regulatory and legislative activity on both a national and local level; assist in the development and creation of new safety training programs and products; and hear the latest initiatives from OSHA and other industry experts. Full details on the Conference and links to registration and the hotel room block can be found here.
For more information, contact Kevin Cannon at (703) 837-5410 or [email protected] or Nazia Shah at (703) 837-5409 or [email protected].

Applications due Dec. 15
The Willis Towers Watson-AGC Construction Safety Excellence Awards (CSEA) is the industry’s elite safety excellence awards program for contractors of all types and sizes. The deadline for submitting applications is Friday, December 15, 2017. So, make sure your construction company doesn’t miss the opportunity to get recognized for its best-in-class safety program!
For more information on the Willis-AGC CSEA program, please visit www.agc.org/csea.

AGC Supports Senate Confirmation of Nominee
The Senate Committee on Health, Education, Labor and Pensions held a hearing this week to consider President Trump’s nomination of Scott Mugno to serve as the next Assistant Secretary of Labor for the Occupational Safety and Health Administration (OSHA). The Senators who participated in the hearing focused their questions on Mugno’s previous track record in the private sector and his views on OSHA’s role in workplace safety and his vision for increasing OSHA’s compliance assistance efforts. Given the makeup of the Senate, it is expected that Mugno’s nomination will advance and he will likely be confirmed in the next several weeks.
AGC sent a letter to the committee calling for approval of Mr. Mugno’s nomination. During his time at FedEx Ground, Mr. Mugno served as managing director of corporate safety, health and fire prevention from 2000 – 2011 until his promotion to vice president of safety, sustainability and vehicle maintenance. Over this period, he demonstrated that he possesses the leadership and collaborative qualities needed to lead OSHA.  He recognized that by working together, the regulated community and the agency can achieve results in further advancing safety in the workplace.
For more information, contact Jim Young at [email protected] or (202) 547-0133.

PABs, Advanced Refunding & Historic Tax Credit
This week, AGC—along with a broad group of stakeholders—urged congressional leaders to maintain key provisions in the tax code that help finance infrastructure projects throughout the country.  Among others, AGC addressed maintaining the tax exempt status of Private Activity Bonds (PABs). PABs are a traditional means of tax exempt financing for surface transportation projects, airports, ports facilities, water and wastewater facilities, and multi-family housing projects. PABs and their tax exempt status were eliminated in the House bill, but maintained in the Senate bill.
AGC also continues to push to maintain the use of Advanced Refunding of Municipal Bonds, which is a tool that allows states and localities to free up borrowing capacity for new investment in infrastructure by taking advantage of lower interest rates on outstanding debt. Advanced Refunding was eliminated in both the House and Senate bills.  Additionally, AGC continues to push to maintain another tool – the Historic Tax Credit – as the House bill eliminates the credit and the Senate bill severely restricts its use.
Contact your Representative and Senators and tell them to not slash these important incentives for public and private construction.
For more information, contact Sean O’Neill at [email protected] or (202) 547-8892.

Conferees Begin Negotiations
On Dec. 2, the Senate passed its version of tax reform legislation on a mostly party line vote of 51-49, with Senator Bob Corker (R-Tenn.) being the only Republican to oppose the bill. Prior to the vote, Senate Republicans unveiled a host of last minute changes to the legislation, which included an increase of the pass-through deduction from 17.4 percent to 23 percent.  Combined with the Senate’s proposed individual rate schedule, this would lower the top marginal effective tax rate on pass-through businesses to 29.6 percent.  This is a significant improvement compared to the original Senate proposal.
Unfortunately, however, there were some negative changes as well. The final Senate bill reinstated both the corporate and individual Alternative Minimum Tax (AMT), with the individual AMT income thresholds temporarily increased.  AGC is very concerned about this development, and we will work with the Congressional tax writers to ensure that the AMT is fully repealed in tax reform.
On Dec. 4, the House of Representatives voted to go to conference with the Senate to resolve the differences between the two bills. Speaker Ryan appointed Reps. Kevin Brady (R-Texas), Devin Nunes (R-Calif.), Peter Roskam (R-Ill.), Diane Black (R-Tenn.), Kristi Noem (R-S.D.), Rob Bishop (R-Utah), Don Young (R-Alaska), Fred Upton (R-Mich.), and John Shimkus (R-Ill.) as the Republican conferees.  Minority Leader Nancy Pelosi named Reps. Richard Neal (D-Mass.), Sander Levin (D-Mich.), Lloyd Doggett (D-Texas), Raul Grijalva (D-Ariz.), and Kathy Castor (D-Fla.) as the Democratic appointees.
On Dec. 6, the Senate also voted to go to conference. Majority Leader McConnell appointed Senators Orrin Hatch (R-Utah), Mike Enzi (R-Wyo.), Lisa Murkowski (R-Alaska), John Cornyn (R-Texas), John Thune (R-S.D.), Rob Portman (R-Ohio), Tim Scott (R-S.C.) and Pat Toomey (R-Pa.) as the Republican conferees. Minority Leader Schumer appointed Senators Ron Wyden (D-Ore.), Bernie Sanders (I-Vermont), Maria Cantwell (D-Wash.), Debbie Stabenow (D-Mich.), Robert Menendez (D-N.J.), Tom Carper (D-Del.), and Patty Murray (D-Wash.) as the Democratic conferees.
Conferees will meet over the coming weeks to negotiate the differences between the House and Senate bills, and eventually produce a conference report, which will then be voted on again by both the House and Senate.  AGC sent a letter to conferees outlining our preferences between the House and Senate bills, along with other outstanding concerns.  We will continue to aggressively push for the best possible bill for the construction industry during these negotiations.
For more information, contact Matthew Turkstra at [email protected] or (202) 547-4733.

AGC Submits Recommendations
AGC submitted its recommendations to the U.S. Small Business Administration (SBA) on existing agency regulations that may be appropriate for repeal, replacement, or modification. In accordance to President Trump’s E.O. 13777 to alleviate unnecessary regulatory burdens, and E.O. 13771 that directs agencies to “identify” at least two existing regulations for elimination whenever any new rule is proposed or issued. AGC highlights the regulatory burden the construction industry bears and offered specific program modifications and solutions.
Among AGC recommendations are:

• Credit for Lower Tier Small Business Subcontracting;


• Improve Processing and Payment of Contract Modification; and


• Remove the Lifetime Limitations on Protégés in the Mentor-Protégé Program.

AGC will continue to advocate for practical and real reforms with the federal agencies and Congress.
For more information, contact Jordan Howard at [email protected] or (703) 837-5368.

Arcane Budget Rules Block Reasonable Real Estate Transactions
On Nov. 28, AGC and industry allies urged President Trump to make common sense changes to arcane accounting rules that will help provide flexibility for federal construction public-private partnership (P3) opportunities. As it stands, federal accounting rules require that federal agencies—like the U.S. Army Corps of Engineers and U.S. General Services Administration—pay up front (or “score”) the complete cost of a construction project. These “scoring” rules do not allow for the fact that the federal government will actually pay for the project incrementally over its lifetime. Consequently, the rule stymies many P3 opportunities, which are structured based on long-term capital planning realities, not upfront financing fantasies.
For more information on these scoring rules and how they have negatively impacted federal construction, click here.
For more information, contact Jimmy Christianson at 703-837-5325 or [email protected].