Week in Review

Federal Aviation Administration Reauthorization Moves in Committee
On June 14, 2023, the House Transportation and Infrastructure Committee held its Federal Aviation Administration (FAA) Reauthorization markup. On the docket were over 20 amendments. This legislation would authorize over $103 billion to the FAA over the next five years with the goal of addressing many different aspects of the administration. The Senate companion bill would authorize $107 billion in funding and was also slated for a markup this week. Both chambers have the goal of approving their versions by the end of July which will likely trigger a bicameral conference that will need to be completed before the September 30th funding deadline.

NECA's Take: NECA sent a letter to the House with recommendations on certain amendments that would impact NECA contractors. In the letter, NECA made the following recommendations:

• Vote No on Rep. Scott Perry’s amendment that would modify prevailing wage and Davis-Bacon thresholds. This vote failed by voice vote.
• Vote No on Rep. Scott Perry’s anti-PLA amendment that would not allow the Secretary of Transportation to require Project Labor Agreements on projects over $35 million. This vote failed in committee 22-42 with bipartisan support.
• Vote Yes on Rep. Hank Johnson’s amendment that would explore the use of hydrogen fuels in aviation. This amendment was withdrawn with the support of the Chairman to find ways to include this in future legislation.
• Vote Yes on Rep. Chris Pappas amendment that would allow the use of solar powered taxiway edge lighting systems. This amendment was withdrawn with support from the Chairman and Ranking Member to continue work on this issue.

House GOP Tax Plan Voted Out of Committee
On June 13, 2023, the House Ways and Means Committee voted on the American Families and Jobs Act, the House GOP tax package that encompass three pieces of legislation, out of committee. This was largely passed on party lines.

The Build It in America Act would:

• Restore the R&D deduction for a minimum of 5 years and as high as 15 years.
• Reinstate the 100% bonus deprecation deduction of the cost of equipment, machinery, and vehicles placed in service.
• Repeal Sec. 45Y Clean Electricity Production Credit and Sec. 48E Clean Electricity Investment Credit of the Inflation Reduction Act.
• Repeal the superfund tax.

The Small Business Jobs Act would:

• Expand the exclusion from gain from qualified small business stocks under IRC § 1202 in three respects. First, the holding period is modified by providing a new 50 percent exclusion for stocks held for at least 3 years, and a 75 percent exclusion for stocks held for at least 4 years. Stocks held for at least 5 years would continue to be eligible for a 100 percent exclusion.
• Increase the maximum amount a taxpayer may expense to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million. The $2.5 million and $4 million amounts are adjusted for inflation for taxable years beginning after 2024.
• Establish rural opportunity zones.

The Tax Cuts for Working Families Act would:

• Give a new bonus guaranteed (standard) deduction amount up to $4,000 per tax year.

NECA's Take: NECA continues to advocate for permanency of the 2017 Tax Cuts and Jobs Act (TCJA) to ensure consistency and predictability for NECA contractors. The current proposed package is a temporary fix for many of the expiring provisions. We will continue to closely monitor its progress and hope for a more complete package that includes permanency of TCJA without substantial repeals of the Inflation Reduction Act by the end of the year.

New Inflation Reduction Act Guidance
On June 14, 2023, the Treasury Department Released new guidance on how State, Local, and Tribal Governments, Non-Profits, U.S Territories, Rural Energy Co-Ops, and other entities can access the clean energy tax credits from the Inflation Reduction Act. The Inflation Reduction Act created two new credit delivery mechanisms—elective pay (otherwise known as “direct pay”) and transferability—that enable state, local, and Tribal governments; non-profit organizations, U.S. territories; and other entities to take advantage of clean energy tax credits. The Inflation Reduction Act allows tax-exempt and governmental entities to receive elective payments for 12 clean energy tax credits, including the major Investment and Production Tax credits, as well as tax credits for electric vehicles and charging stations. Businesses can also choose elective pay for three of those credits: the credits for Advanced Manufacturing (45X), Carbon Oxide Sequestration (45Q), and Clean Hydrogen (45V). The Inflation Reduction Act also allows businesses not using elective pay to transfer all or a portion of any of 11 clean energy credits to a third-party in exchange for tax-free immediate funds, so that businesses can take advantage of tax incentives if they do not have sufficient tax liability to fully utilize the credits themselves.

NECA's Take: NECA has a resource center available to contractors with resources related to the Inflation Reduction Act that is continually updated as guidance is released. The new guidance allows for organizations that are exempt from tax by § 501(a) are eligible for elective pay. This would include all organizations described in § 501(c), such as public charities, private foundations, social welfare organizations, labor organizations, business leagues, and others.

House Appropriations Committee Passes Partial Government Funding
On June 21, 2023, the House Appropriations Committee passed 4 out of 12 spending bills. They still have 8 more spending bills to go to avoid triggering the Fiscal Responsibility Act provision that requires Congress to pass all 12 spending bills by the end of the year. The Senate announced they will be going a different route, having funding levels set at the agreed upon spending caps, unlike the House bills which went far below.

NECA's Take: NECA is closely monitoring the appropriations process and will weigh in as these bills go to the House Floor and are negotiated by each chamber. NECA continues to advocate for full funding of federal construction accounts, increased funding for key energy programs, and increased loan authority to programs funding infrastructure projects.

National Defense Act Authorization Act Moves Out of Committee
The House Armed Services Committee debated almost 600 amendments to the National Defense Authorization Act (NDAA), passing the legislation out of committee with overwhelmingly bipartisan support 58-1. The bill would authorize $874.2 billion in spending for FY24.

NECA's Take: NECA will continue to monitor the legislation as the Senate Armed Services begins their markup behind closed doors. The two chambers will then come together on a final conference report by the year's end. NECA was able to secure key provisions included in the House version of the NDAA:

• Ensure federal construction accounts are fully funded.
• Make the Defense Community Infrastructure pilot permanent, providing an important authority for the funding of community infrastructure projects that benefit military installations and readiness.
• Authorize $276 million dollars in military construction for new child development centers on military installations.
• Extend the Pilot Program on Domestic Investment in the Small Business Innovation Research (SBIR) program, to allow contracts to be more easily awarded to companies with a variety of investment structures.
• Authorize $32.8 billion in shipbuilding funding for the procurement of ten battle force ships; including two Virginia-class submarines.
• Support shipyard investment and recapitalization efforts by providing for new grant authority.
• Include improvements and clarifications to the Port Infrastructure Development Program administered by the Maritime Administration and authorizes appropriations at the FY24 requested amount.
• Standardize access to military installations in the United States by requiring the Secretary of Defense to develop protocols, criteria, and guidance on screening standards, security, and authorized individuals. This will ensure that across services, there is a standard process that allows visitors and workers to access installations.

 

Department of Commerce Announces $930 Million to Expand and Strengthen America’s High-Speed Internet Networks
The Department of Commerce’s National Telecommunications and Information Administration (NTIA) announced $930 Million to expand middle mile high-speed internet infrastructure across 35 states and Puerto Rico. The Enabling Middle Mile Broadband Infrastructure Program invests in projects that build regional networks that connect to national internet networks. The $1 billion Middle Mile program funds construction, improvement, or acquisition of middle mile infrastructure, along with administrative costs associated with running the program. The program will deploy over 12,000 miles of new fiber across the country.

NECAPAC Update
Special thanks to Todd Grossweiler of Allison-Smith and Marc Tower of Citadel Electric Group for joining the NextGen PLC program!

Thanks to Nicolaus Feldmann of Eldor Contracting Corp for renewing his PLC membership!

Thank you to Nicolaus Feldman of Eldor Contracting Corp for renewing his PLC plus membership as well!

NECA On the Move
Over the past two weeks, NECA Government Affairs team met with Senator Murray (D-WA), Rep. David Joyce (R-OH), Rep. David Valadao (R-CA), Rep. Lori Chavez-Deremer (R-OR), Rep. Claudia Tenney (R-NY), Rep. Marc Molinaro (R-NY), Rep. Brian Fitzpatrick (R-PA),  Rep. Donald Norcross (D-NJ), Rep. Adam Smith (D-WA), Rep. Rosa DeLauro (D-CT), Rep. Marcy Kaptur (D-OH), Rep. Adam Smith (D-WA), Rep. Donald Norcross (D-NJ), Rep. Marcy Kaptur (D-OH), Rep. Sam Graves (R-MO), Rep. Ann Wagner (R-MO), Rep. Claudia Tenney (R-NY), Rep. Fischbach (R-MN), Rep. Pete Stauber (R-MN),   Senate Health, and Education and Labor Committee, Senate Environmental and Public Works Committee, House Armed Services Committee, House Transportation and Infrastructure Committee, and the House Appropriations Committee.