Bill will increase energy and fuel costs, restrict highway capacity improvements The Senate Environment and Public Works Committee this week conducted three days of legislative hearings with over 50 witnesses providing testimony on S. 1733, the Clean Energy Jobs and American Power Act, a bill that would create a "cap and trade" regulatory program to reduce U.S. greenhouse gas (GHG) emissions to address global climate change concerns.  The bill aims to reduce U.S. GHG emissions by 20 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. Late last week, Senators John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) released a 932-page revised "Chairman's Mark" to S. 1733.  Significant in the revisions are the specifications on the distribution of emission allowances under the bill.  Free emission allowances are highly prized by affected industries seeking to keep their costs lower under the cap and trade bill.  The revised bill proposes to distribute up to 75 percent of the total allowances for free, with the biggest chunk set aside to electric utilities to keep consumer electricity costs affordable.  The revised bill would also set-aside about 3 percent of auctioned allowance revenue for "clean" transportation projects.  Additional auction proceeds would be available for states to fund energy-efficient retrofits of existing buildings. Friday, the U.S. Environmental Protection Agency (EPA) estimated that the average household cost of S. 1733 would be about $100 per year.  In contrast, the Heritage Foundation has estimated that a family of four's average household expenses would increase by about $4,600 per year. The U.S. House of Representatives passed its comprehensive energy and climate change legislation, H.R. 2454, the American Clean Energy and Security Act, in June. Proponents of climate change legislation in the Senate are coordinating at least five committees with jurisdiction over the issue and have signaled their intent to bring a comprehensive bill to the Senate floor as soon as possible following the debate on health care legislation.  The Senate Energy and Natural Resources Committee approved its energy provisions in June.AGC has been working with stakeholders in the real estate, design, and construction industry to communicate the industry's concerns with energy and cap and trade legislation.  AGC is largely concerned that cap and trade would increase the cost of construction and that its impact on the economy would reduce demand for construction services.  AGC has prepared a document Top Ten Things Contractors Need to Know about Climate Change that summarizes AGC's concerns with energy and climate change legislation. AGC and several transportation stakeholders sent a letter to Senate Environment and Public Works Committee Chair Boxer and Ranking Member Senator Jim Inhofe (R-Okla.) Wednesday outlining concerns with the transportation planning provisions in s. 1733 that would make planning for and building highway capacity projects more difficult.AGC encourages members to express their concerns with the Senate climate change bill by contacting their senators using AGC's Legislative Action Center.

Today the House of Representatives approved the conference report providing appropriations for the Environmental Protection Agency, Department of the Interior and other agencies. The Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010 passed on a party line vote (247-178) and included significant increases for EPA programs, including a $2 billion increase over FY09 SRF programs.  The bill provides $3.6 billion federal assistance for communities' water infrastructure programs including $1.38 billion for the Drinking Water State Revolving Loan Fund and $2.1 billion for the Clean Water State Revolving Fund, which will be allocated to states under existing distribution formulas. In addition, $157 million was earmarked for specific municipal projects.Similar to the Recovery Act, this bill requires that 30 percent of funds be distributed in the forms of grants, loan principal forgiveness or negative interest loans for communities with the greatest needs. Additionally, 20 percent of the funds must be used by the states for projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities. The bill also includes Davis-Bacon prevailing wages under a compromise agreement that will apply these wages for a period of one year. The bill does not include Recovery Act "Buy American" requirements.AGC has long advocated for increased appropriations and authorization levels to meet the nation's unmet needs for water infrastructure.The Senate is expected to vote on and pass the conference report in the near term. To view a complete copy of the conference report click here.

In a final series of directives issued by the Office of Management and Budget (OMB) on October 27, the administration said that the civilian agencies should increase their acquisition workforce by at least five percent by 2014. In addition, the agency called for a limit on the use of noncompetitive and other "higher-risk" types of contracts.A second memo released by OMB, Increasing Competition and Structuring Contracts for the Best Results, provides agencies with a series of guidelines to help Chief Acquisition Officers (CAOs) and Senior Procurement Executives (SPEs) evaluate the effectiveness of their agency's competition practices and processes for selecting contract types. The guidelines focus around three key questions:1) How is the agency maximizing the effective use of competition and choosing the best contract type for the acquisition?2) How is the agency mitigating risk when noncompetitive, cost-reimbursement, or T&M/LH contracts are used?3) How is the agency creating opportunities to transition to more competitive and lower risk contracts?

President Barack Obama on October 28 signed into law $33.5 billion spending bill to fund government energy and water programs for the 2010 fiscal year.The final piece of legislation includes funding for the Corps of Engineers of $5.4 billion, $43 million above FY 2009 and $320 million above the administration's 2010 request. The agreement includes $2.4 billion, $198 million above 2009, to address more than $1 billion in the backlog of operations and maintenance for navigation infrastructure that is critical to the U.S. economy.The bill also includes $2 billion for construction projects, $313 million above the request, and $160 million for investigations, $60 million above the request, "to plan and design America's next generation of water resource infrastructure."Finally, the bill provides $1.13 billion to the Interior Department, $67 million above the request and $12 million above 2009, to continue to support and improve the nation's water infrastructure, including $1.1 billion for the Bureau of Reclamation for dams, canals, water treatment and conservation, and rural water projects.   The full text of the law can be accessed here.Further details are included in the Conference Report.

U.S. Small Business Administration on October 28 announced a notice of proposed rulemaking that would substantially revise contracting rules for firms benefiting from the 8(a) Business Development program. The proposed changes are the result of the first comprehensive review of the 8(a) program in several years. The rules cover a variety of areas of the program, ranging from providing further clarification on determining economic disadvantage to requirements on Joint Ventures and the Mentor-Protégé program. The public comment period on the proposed changes is open for 60 days.Some of the components of the 8(a) program that the proposed changes will affect include:Joint Ventures - qualifying that 8(a) firms are required to perform a significant portion of the work to ensure that these companies are able to build capacity;Economic Disadvantage - providing more clarification on economic disadvantage as it relates to total assets, gross income, retirement accounts and a spouse of an 8(a) company owner in determining the owner's access to capital and credit;Mentor-Protégé Program - requiring that assistance provided through the Mentor-Protégé relationship is directly tied to the protégé firm's business plan;Ownership and Control Requirements - providing flexibility in admitting individuals of immediate family members of current and former 8(a) participants;Tribally-Owned Firms - seeking public comments on the best way to determine whether a tribe meets the criteria of being economically disadvantaged for the 8(a) program;Excessive Withdrawals - amending regulations on what is considered excessive as a basis for termination or early graduation from the 8(a) program; andBusiness Size for Primary Industry - requiring that a firm's size status remain small for its primary industry code during its participation in the 8(a) program.AGC is currently reviewing the proposed rule and will prepare formal comments to the SBA. In addition, AGC will work with SBA and Small Business Congressional Leaders on Capitol Hill to continue advocating common-sense contracting reforms that will benefit contracting for the construction industry.Comments to this proposed rule are due on or before Dec. 28, 2009 and may be submitted to www.regulations.gov, where they will be posted or mailing them to 409 3rd St. SW, Mail Code: 6610, Washington, DC 20416 or via e-mail at:8aBD2@sba.gov.

On October 29, the House Education and Labor Committee held a hearing on "Nevada's Workplace Health and Safety Enforcement Program: OSHA's Findings and Recommendations." The Committee was highly critical of Nevada's State OSHA and the deficiencies cited in federal OSHA's review of their program (available here). The review was conducted after public attention was drawn to a number of fatalities over an 18-month period between 2006 and 2008.Mr. Jordan Barab, Deputy Assistant Secretary for OSHA and Acting Assistant Secretary, testified that the review conducted of Nevada is only the first. OSHA plans to conduct simultaneous reviews of all the rest of the states that have State Plans, complete recommendations for improvement, and set deadlines for those recommendations to be put in place. OSHA plans to start conducting these reviews soon, and has set April 2010 as the target for release of these reviews. Barab also testified that, since all State Plans are required to "at least as effective" as Federal OSHA in protecting worker health and safety, federal OSHA will be reviewing the statistical benchmarks it uses to determine if a State Plan has met this burden. AGC will continue to monitor these developments.

Failing once again to pass a substantive extension or the six-year authorization, the House and Senate have decided to include a short extension of SAFETEA-LU in the Omnibus appropriations bill.

Democratic leaders in both chambers continue to work out the final details of sweeping health care reform legislation before it can be brought for a vote.  The major sticking point remains the inclusion of a public option. It appears that the House will be able to pass a bill with the public option and the Senate is having trouble finding 60 senators to support it.The Senate bill must be fully merged with the two committee versions and then sent to the Congressional Budget Office for final cost analysis before it can be brought for a vote. On Monday the 1,500 page Legislative Language of S. 1796, the America's Healthy Future Act was released. The process of fully merging the bill and sending the bill to CBO could occur as early as this week.AGC remains concerned over employer mandates, the penalties for companies that cannot afford to provide health care, the uncertainties in coverage requirements, the affect on temporary and seasonal employees, the limitations on FSAs, HSAs and HRAs, and expanded COBRA mandates. Even with the CBO score of the Senate Finance bill, AGC remains concerned that the exorbitant costs of the proposed plans will result in increased taxes on individuals and companies. AGC supports reform that increases coverage, choice and competition in the marketplace. The inclusion of a public plan in the legislation will likely drive private insurers out of the market and the projected savings from the proposed legislation may never materialize, resulting in further tax increases to make up the shortfall.

With nationwide unemployment approaching 10 percent, Congressional leaders are considering whether to enact additional legislation to spur job creation.  Specifically, leaders are debating whether to include an extension of the $8,000 first-time homebuyer tax credit set to expire on November 30, 2009, and allow up to a 5-year carryback of net operating losses (NOL), among other provisions, such as a new tax credit for job creation, to legislation extending federal unemployment insurance currently pending in the Senate.  Both measures are supported by AGC and were included in the plan, Build Now for the Future, A Blueprint for Economic Growth.Extension of the $8,000 first-time homebuyer tax credit is gaining momentum in both the House and Senate, but consensus had not yet been reached on how long the tax credit should be extended and whether to remove the first-time homebuyer requirement.  In the Senate, proponents are seeking to extend the tax credit to all homebuyers and extend it until June 30, 2010, while also doubling the credit phase-out threshold to $150,000 for singles and $300,000 for couples.  Under debate is whether the offset the estimated $16.7 billion cost of the proposal.  Many in Congress consider this and other jobs creation measures to be emergency expenses that do not need to be paid for.The NOL provision would allow unprofitable companies to obtain immediate cash refunds on taxes they paid in previous years.  Current law allows companies to get refunds of taxes paid in the previous two years, or five years for smaller companies in 2008.  Proponents of NOL relief - including AGC - are seeking to extend the two-year period to five years for all companies for both 2008 and 2009 losses. AGC issued a statement today and sent a letter to Capitol Hill in support of these measures.Democratic leaders are also contemplating additional efforts to stimulate economic activity and have been meeting with economists to discuss recovery options.  These so-called "mini-jobs bills" could be enacted separately or attached to other jobs creation measures pending before Congress, such as the reauthorization of the surface transportation program.

This week the Dept. of Housing and Urban Development (HUD) issued a waiver of Section 1605, or the Buy American requirements, in the American Recovery and Reinvestment Act for projects using Community Development Block Grant-Recovery (CDBG-R) funds and Neighborhood Stabilization Program 2 (NSP2) funds.The Recovery Act appropriated $1 billion in funds to states and local governments to carry out eligible activities on an expedited basis. The Recovery Act also appropriated $2 billion for the second round of NSP2, ''[f]or the provision of emergency assistance for the redevelopment of abandoned and foreclosed homes.''This waiver provides that HUD will accept any other agency's waivers and well as any waivers from other HUD programs. They also waive entirely the Buy American requirements for public housing projects with less than 8 units, when the grant size is less than $100,000, or any project that is substantially under construction or contract prior to receipt of funds. These exceptions were made on the basis of the of the "Public Interest" option of potential waivers provided in Section 1605(b).This waiver joins others HUD has issued for the Capital Fund Recovery Formula and Competition (CFRFC) grant funds  and a project specific waiver for the Boston Housing Authority's HOPE IV project.