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.

Awaiting EEOC Guidance on Reporting Requirements and Process

The U.S. Equal Employment Opportunity Commission (EEOC) has opened the EEO-1 online reporting portal following a recent court order reinstating the previously revised Obama administration EEO-1 form’s pay data reporting requirements that the Office of Management and Budget (OMB) halted in 2017. The EEO-1 is an annual survey that requires all private employers with 100 or more employees and federal government contractors or first-tier subcontractors with 50 or more employees and a federal contract, sub¬contract or purchase order amounting to $50,000 or more to file the EEO-1 report. Barring EEOC action or an appeal by the administration before the survey’s deadline—May 31, 2019—filers should be prepared for the pay data requirements to be included in the survey.

Due to the government shutdown, the opening of the survey was postponed and the deadline to submit EEO-1 data extended until May 31, 2019. The traditional EEO-1 report provides employment data by race/ethnicity, gender and job categories. The EEO-1 portal currently does not include “Component 2” of the EEO-1 form that would require the additional pay data nor has the EEOC provided filers with any guidance yet.  The revised “Component 2” of the report would require W-2 pay and FLSA hours worked information. The filing of the EEO-1 report is not voluntary and is required by federal law.

The EEOC has stated that they are working diligently on next steps in the wake of the court’s order and an update for filers has been ordered by Apr. 3.

AGC opposed the new data collection, calling upon the Trump administration and Congress to rescind the Obama administration Presidential Memorandum ordering the new EEO-1 form, and the form itself. AGC submitted comprehensive comments explaining its position to the EEOC in Apriland August 2016.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382

The construction industry is experiencing record economic activity with low unemployment and little expectation that the current domestic workforce can alone meet employment demand. Currently, our nation's immigration system provides the high-tech sector, agricultural businesses, and seasonal employers with options for guest workers. It does not for the construction industry.

Contact your members of Congress and tell them to support “The Workforce for an Expanding Economy Act,” which would allow contractors to hire year-round construction guest workers while protecting American jobs and reducing incentives for individuals to enter the country illegally.

For more information contact James Young at youngj@agc.org or (202) 547-0133.

Would Annually Provide $100M in Grants for Diesel Retrofits

On March 12, a bipartisan group of senators—led by Tom Carper (D-DE) and John Barrasso (R-WY)—introduced an AGC-backed bill to reauthorize the Diesel Emissions Reductions Act (DERA) program.  The bill would provide $100 million annually through fiscal year 2024 for grants and rebates to states and localities to upgrade or replace older diesel engines, including off-road construction equipment.  AGC chapters – working with AGC of America – have won millions in federal funds to support AGC members’ voluntary retrofit projects, in addition to leveraging millions more in matching and in-kind contributions to help their members afford the high cost of reducing emissions from construction equipment.

AGC will continue to work with Congress and the administration to ensure they recognize the importance of the DERA program and they provide greater financial assistance to the many equipment owner who seek a fair and effective way to reduce emissions from existing fleets of off-road equipment.

For more information, contact Sean O’Neill at oneills@agc.org.

Recommendations Also Detail Other Industry Best Practices

On March 11, AGC met with Lt. Gen. Todd Semonite, U.S. Army Corps of Engineers (USACE) Chief of Engineers and Commanding General, and other USACE leaders. AGC formally presented the “Associated General Contractors of America’s Recommendations Regarding the U.S. Army Corps of Engineers.” Among others, the recommendations include a streamlined change order/contract modification process, an outline of key USACE personnel performance indicators, leading project indicators for early detection and correction to improve project delivery outcomes, and a number of other best practice suggestions.

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

Sets Annual Salary Threshold at $35,308

On March 13, the U. S. Department of Labor’s (DOL) Wage and Hour Division (WHD) announced a Notice of Proposed Rulemaking (NPRM) updating the Fair Labor Standards Act (FLSA) overtime regulations. This new proposal would update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary threshold for exempt employees from $455 to $679 per week (equivalent to $35,308 per year). The NPRM comes following a 2017 Request for Information (RFI) and is in line with AGC’s formal recommendations.

Specifically, the NPRM includes:

• • The proposal increases the minimum salary required for an employee to qualify for exemption from the currently-enforced level of $455 to $679 per week (equivalent to $35,308 per year);

• • The proposal increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year;

• • A commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking;

• • Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level;

• • No changes overtime protections for:
    
    • • Laborers including: non-management production-line employees
    
    
    • Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers;

• • No changes to the job duties test; and

• No automatic adjustments to the salary threshold.

AGC will continue to provide input to the DOL on the impact this update might have on the construction industry and will notify members of any developments.

For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.

Would Help Retail, Restaurant Renovation Projects

On March 14, a bipartisan group of senators--led by Sens. Pat Toomey (R-PA) and Doug Jones (D-AL)— 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. 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, significantly affects cost-recovery and must be addressed to help many of these construction improvement projects get back on track.

While a drafting error should be relatively easy to fix legislatively, unrelated partisan interests have thus far prevented passage of all but a few “technical corrections” from the TCJA.  Securing bipartisan support for this bill is a significant step towards fixing this unintended problem.

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

Includes Infrastructure Plan Fact Sheet

On March 11, the White House Office of Management and Budget (OMB) released the president’s fiscal year (FY) 2020 top-line budget request. In tandem with this request, OMB released an infrastructure fact sheet calling for long-term surface transportation reauthorization, solvency of the highway trust fund, and an additional $200 billion investment for other infrastructure priorities. AGC will further analyze the impacts of the FY2020 budget on the construction industry upon the March 18 release of the full budget request.

For more information, contact Sean O’Neill at oneills@agc.org.