Would Help Retail, Restaurant Renovation Projects

On March 25, a bipartisan group of members of the House of Representatives – led by Reps. Jimmy Panetta (D-Calif.) and Jackie Walorski (R-Ind.)— introduced AGC-supported legislation to correct a drafting error from the Tax Cuts and Jobs Act (TCJA, the 2017 tax reform law), that inadvertently extended the depreciation schedule for interior improvements to commercial properties from 15 years to 39 years. This legislation mirrors legislation already introduced by Senators Pat Toomey (R-PA) and Doug Jones (D-AL).  AGC has heard from many contractors and service providers that this error is materially impacting construction projects across the country, forcing building owners to delay or reconsider projects.
Prior to passage of TCJA, any interior improvements to commercial properties (designated in the tax code as “restaurant, retail and leasehold improvements”) could be depreciated over 15 years.  The TCJA included a provision that sought to simplify this section of the code by consolidating multiple classes of infrastructure eligible for the 15-year depreciation schedule into a new definition, called “qualified improvement property” or QIP.

Additionally, under this section of the Internal Revenue Code, QIP was intended to be eligible for temporary 100 percent bonus depreciation, thus allowing these commercial improvements to be expensed in one year until the temporary full expensing expires in 2023.  However, due to a drafting error, the TCJA inadvertently changed QIP’s depreciation schedule from 15 years to 39 years.  This is a substantial change, and significantly affects cost-recovery and must be addressed to help many of these construction improvement projects get back on track.
With bipartisan legislation introduced to “fix the glitch” in both the House and Senate, AGC is hopeful that this error can be corrected this year.

For more information, contact Matt Turkstra at matthew.turkstra@agc.org.

Part of Updating Overtime Rules

On March 28, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) unveiled a proposed rule that would update the regulations governing regular rate requirements for the first time in more than 50 years. Regular rate requirements define what forms of payment employers include and exclude in the "time and one-half" calculation when determining workers' overtime rates. The proposed rule focuses primarily on clarifying whether certain kinds of perks, benefits, or other miscellaneous items must be included in the regular rate. AGC will provide input to the DOL on the impact this update might have on the construction industry and will notify members of any developments.
Specifically, the proposed rule includes clarifications to confirm that employers may exclude the following from an employee's regular rate of pay:

• • The cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;

• • Payments for unused paid leave, including paid sick leave;

• • Reimbursed expenses, even if not incurred "solely" for the employer's benefit;

• • Reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;

• • Discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;

• • Benefit plans, including accident, unemployment, and legal services; and

• Tuition programs, such as reimbursement programs or repayment of educational debt.

The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, "call back" pay, and others.
For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.

Would Establish Government Neutrality in Federal and Federally-Assisted Contracts

During the week of March 25, U.S. Sens. Todd Young (R-Ind.) and David Perdue (R-Ga.), and Reps. Ted Budd (R-N.C.) and Francis Rooney (R-Fla.) introduced legislation (S. 907 and H.R. 1858) that falls in line with AGC’s long standing position on government-mandated project labor agreements. That position is that AGC neither supports nor opposes contractors’ voluntary use of PLAs on government projects, but strongly opposes any government-mandate for contractors’ use of PLAs. To view more details on AGC efforts opposing government mandated PLAs, click here.

For more information, contact James Young at youngj@agc.org. 

Multiemployer Pensions: Support Composite Plans
The nation’s multiemployer pension plan system is facing a crisis. Various measures have been proposed to address the severe underfunding of these plans as well as the federal agency serving as their financial backstop - the Pension Benefit Guaranty Corporation. However, one pension reform policy that should be enacted immediately is the authorization of composite plans. Follow the link to contact your U.S. Representative and Senators and urge them to support legislation on composite plans.
A composite plan is a hybrid between a traditional defined contribution and a defined benefit plan. Composite plan legislation would be beneficial to the construction industry because:

• The plan design would protect retirement savings from market downturns or other unforeseen circumstances;


• These plans provide lifetime income to participants and give employers certainty as to how much they must contribute to the plans; and


• The plan design is tried, true, and trusted. In fact, a similar, successful model is utilized in Canada.

The president issued a national emergency declaration to redirect approximately $6.7 billion towards the construction of barriers

Construction spending inched lower in October from September levels but increased from the October 2017 total, according to analysis.

Would Annually Provide $100M in Grants for Diesel Retrofits

On March 14, a bipartisan group of Representatives – led by Doris Matsui (D-CA) and Billy Long (R-MO) – introduced the AGC-backed House companion to the Senate re-authorization for the Diesel Reductions Act (DERA) program. Through the DREA program, AGC chapters – working with AGC of America – have won millions in federal funds to support AGC contractor members’ voluntary retrofit projects, in addition to leveraging millions more in matching and in-kind contributions to help contractor members afford the high cost of reducing emissions from construction equipment.

For more information, contact Sean O’Neill at oneills@agc.org or (202) 547-8892.

Over the decades, determining where federal Clean Water Act jurisdiction lies has added regulatory uncertainty, delay, and cost to construction projects throughout the nation. The U.S. Environmental Protection Agency’s (EPA) recently proposed “Waters of the United States” (WOTUS) rule will help construction projects move forward in a timelier manner, clearly limit federal jurisdiction over water and wetlands, and continue to protect our nation’s clean water. Please contact the EPA today to let them know that you support clear federal clean water permitting guidelines.

For more information contact Melinda Tomaino at tomainom@agc.org or (703) 837-5415.

AGC Provides Detailed Analysis of Construction Funding Requests

On March 18, the White House Office of Management and Budget released a full rundown of President Trump’s fiscal year (FY) 2020 budget request. Overall, the request proposed funding cuts for most federal agencies. While total funding for the Department of Transportation is reduced by 22 percent, there is a large increase in funding for discretionary transportation grant programs including INFRA and BUILD. In addition, the budget and supporting documents state the administration’s intent to work with Congress on long-term solvency of the Highway Trust Fund and reserves $200 billion for “additional infrastructure investments.” However, the request provides little budgetary specifics for addressing those initiatives. For a full analysis of federal construction accounts in the president’s budget, click here. This sheet does not reflect reserved funding for the administration’s proposed $200 billion infrastructure initiative.

For more information, contact Sean O’Neill at oneills@agc.org or Cory Gattie at cory.gattie@agc.org.

No Project Has Yet Been Designated

On March 18, the Department of Defense (DOD) identified list of roughly $12.9 billion of Military Construction Projects from which the Administration could reprogram $3.6 billion from military construction projects for construction of additional physical barriers along the southern border. It is important to note that this is a broad list and no specific military construction project –or other federal construction project—has officially been chosen for reallocation.

Largely in line with AGC's recommendations, DOD stated that the following conditions applied when selecting projects for this list:

• • No military construction projects that already have been awarded, and no military construction projects with FY 2019 award dates will be impacted.

• • No military housing, barracks, or dormitory projects will be impacted.

• The pool of potential military construction projects from which funding could be reallocated to support the construction of border barrier are solely projects with award dates after September 30, 2019.

In response to Congress failing to fully fund the Administration’s request for additional resources for border security, President Trump issued a Declaration of Emergency to redirect $6.7 billion towards the construction of barriers along the southern border. The Emergency Declaration reprograms $2.5 billion from Department of Defense counterdrug activities, nearly $600 million from the Treasury Forfeiture Fund, and $3.6 billion from military construction projects towards construction of the border wall.

The Administration has stated that it intends to request replacement funds for any project that is affected by reallocation.  Congressional Democratic leadership has stated it opposes replacement funds.  AGC will continue to monitor this emergency declaration as more developments occur.

For more information, contact Jordan Howard at jordan.howard@agc.org or (703) 837-5368.