Information for Construction Contractors Operating Under the Federal Government Shutdown The fiscal year 2013 appropriations law expired October 1, 2013, the beginning of FY 2014.  The failure by lawmakers to reach an agreement on funding for the new fiscal year resulted in a federal government shutdown.  The shutdown has left contractors wondering how or even if they can continue to perform their federal contracts.  Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown.  However, for most cost-type contracts, time and materials contracts, IDIQ/MATOC/MACC contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely.  Therefore, it is important for contractors to prepare for the consequences of a government shutdown.

The 2013 Highway and Utilities Contractors Issues Conference will be held Nov. 7-9, 2013, at the Arizona Biltmore in Phoenix, Ariz.  Industry professionals from companies involved in building highway, bridge, utility and underground construction, transit, airport runway and rail projects will benefit from this conference.  Presentation and discussions on major trends in highway and utility construction will be featured, including:

The House Interior/Environment Appropriations Subcommittee finished up its work on a bill that would fund, among other things, the Environmental Protection Agency (EPA) and its programs for fiscal year (FY) 2014.  The EPA saw almost a $3 billion cut to their programs, with the State Revolving Loan Funds (SRFs) taking the brunt of the cuts.

More than 50 industry and local government groups sent a letter asking Senators to request the Senate Finance Committee leaders maintain the federal tax exemption on municipal bond interest as they consider the chamber’s priorities for its comprehensive tax reform package.

The House Energy and Water Appropriations Subcommittee approved a $30.4 billion energy and water spending bill for FY 2014 after adding a policy rider that would bar the Army Corps of Engineers (USACE) from implementing guidance that clarifies which U.S. waters fall under federal protection via the Clean Water Act (CWA). The guidance, which was proposed in May 2011 and sent to the Office of Management and Budget (OMB) for interagency review and finalization in February 2012, clarified which waters are subject to CWA jurisdiction in response to two U.S. Supreme Court decisions.

A letter is being circulated among members of the House by Reps. Ruppersberger (R-Md.) and Hultgren (R-Ill.) that expresses concern over proposals to tax or partially tax municipal bond interest. The letter requests that leadership not pursue these policy proposals. AGC members are asked to write to their member of Congress asking them to sign on and protect this important infrastructure finance tool.

This week, Rep. Tim Bishop (Ranking Member of the House Water Resources and Environment Subcommittee) reintroduced the Water Quality Protection and Job Creation Act of 2013, along with Reps. King (R-N.Y.) and Young (R-Alaska) and the entire democratic caucus of the Transportation and Infrastructure Committee. The bill – functionally identical to legislation the Congressman introduced last Congress – would reauthorize the clean water state revolving loan fund at $13.8 billion over five years. The legislation would also establish a clean water trust fund (with a provision studying future possible funding sources) and create a new federal program of direct loans and loan guarantees for water infrastructure.

President Obama released his Budget Proposal for FY 2014 on April 10. In it he proposes cuts to both the Environmental Protection Agency’s (EPA) state revolving loan funds (SRFs) and the Rural Utilities Service’s Rural Water and Waste Disposal program. He also proposes changes to the tax code that would affect water infrastructure funding.

You may have noticed that the Municipal & Utilities Division has a new name – the Utility Infrastructure Division.  After the Municipal & Utilities Division Leadership voted to approve the name change at its November 2012 meeting and the Executive Board agreed at their January 2013 meeting, the change was presented as part of a larger update to the AGC bylaws that was accepted unanimously by the AGC Board of Directors at the 2013 AGC Annual Convention.

With the enactment of sequestration and final passage of FY 2013 continuing appropriations, which set funding levels through Sept. 30, 2013, we now know the total dollars appropriated for the SRF and RUS programs and have a more complete picture of future water infrastructure funding. The Clean Water SRF received $1.45 billion and the Drinking Water SRF received $908.7 million – a total cut for the SRFs of $27.5 million, or a 1 percent reduction from FY 2012. The RUS Rural Water and Waste Disposal Loan Program, however, was one of the few winners in this year’s appropriations fight. The program received $524.4 million, an increase of $11.4 million, or 2 percent, over FY 2012.