Building A Stronger Building A Stronger EconomyEconomy

2005 NACF Meeting2005 NACF Meeting

Oaxaca, Oax, MexicoOaxaca, Oax, Mexico

Sam HunterSam Hunter

AGC of America AGC of America PresidentPresident

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AGC’s Goals and AGC’s Goals and Guiding PrinciplesGuiding Principles

• Promote construction industry growth

• Establish infrastructure investment as a necessary element of economic growth

• Ensure that taxation, regulation and mandates are designed to promote economic opportunity for AGC members

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How We Achieve Our How We Achieve Our GoalsGoals•Credibility

•Staff - 20 Staffers Who Monitor Legislative and Regulatory Issues

•Chapters- 98 Chapters Across the U.S.

- At least one chapter in each state

•Active Membership- 33,000 member companies

•7,000 general contractors•11,000 specialty-contracting firms•13,000 service providers and suppliers

•Political ConnectionsBuilding Your Quality of Life

What AGC OffersWhat AGC Offers

•Evaluate the Political Atmosphere

•Identify Viable Agenda Options

•Discussion of Strategy

•Action items Communicate Priorities

Internally and Externally Continue to Lead Important

Coalitions Coordinate Targeted Grass

Roots Campaigns Identify Champions Deliver the Votes

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AGC AGC OverviewOverview• AGC has a Broad Agenda

• AGC has a Substantial Presence

• Elections and Policy Decisions have Consequences for the Industry

• Government Regulations Cost the Economy an Estimated $850 Billion Annually

• The Industry Needs to Participate in the Process

• AGC has Made it EasyBuilding Your Quality of Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

•AGC PACAGC PAC

•Infrastructure InvestmentInfrastructure Investment•Highway ReauthorizationHighway Reauthorization•Drinking And WastewaterDrinking And Wastewater•Water ResourcesWater Resources

•Reverse AuctionsReverse Auctions•Tax PolicyTax Policy•EnvironmentEnvironment•Tort ReformTort Reform•Safety & HealthSafety & Health•Immigration ReformImmigration Reform

Building Your Quality of Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

AGC MAKES A DIFFERENCE ON ELECTION DAY!AGC MAKES A DIFFERENCE ON ELECTION DAY!

•AGC PAC will raise and spend $1,000,000 AGC PAC will raise and spend $1,000,000 during the 2006 election cycle.during the 2006 election cycle.

•In 2004 AGC PAC supported the winning In 2004 AGC PAC supported the winning candidate 89% of the time.candidate 89% of the time.

•AGC’s Legislative Action Center (AGC’s Legislative Action Center (www.agc.org/lac) keeps members informed.) keeps members informed.

•AGC Grassroots encourages members to AGC Grassroots encourages members to register and vote.register and vote.

AGC PAC SPECIFICSAGC PAC SPECIFICS

•Contributions all personal, not corporate.Contributions all personal, not corporate.

•AGC PAC & Grassroots actively engages in AGC PAC & Grassroots actively engages in federal races.federal races.

•Construction industry needs must be heard!Construction industry needs must be heard!Building Your Quality of Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

INFRASTRUCTURE INVESTMENT –INFRASTRUCTURE INVESTMENT –

HIGHWAY REAUTHORIZATIONHIGHWAY REAUTHORIZATION

•Congress passed Transportation Congress passed Transportation Equity Act July 29.Equity Act July 29.•$286.4 billion over six years – A 31% $286.4 billion over six years – A 31% increaseincrease

•Largest public works bill in U.S. history.Largest public works bill in U.S. history.•AGC played a central leadership roleAGC played a central leadership role

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AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

INFRASTRUCTURE INVESTMENT –INFRASTRUCTURE INVESTMENT –HIGHWAY REAUTHORIZATIONHIGHWAY REAUTHORIZATION

Key AGC Policy Victories:Key AGC Policy Victories:•Maintain Highway Trust Fund IntegrityMaintain Highway Trust Fund Integrity•AGC worked to ensure all dollars will be AGC worked to ensure all dollars will be used for transportationused for transportation

•Streamline Environmental Review Streamline Environmental Review ProcessProcess•AGC pushed to highway planning and AGC pushed to highway planning and project development streamlined to project development streamlined to complete vital transportation projects complete vital transportation projects quicklyquickly

•Improve Work Zone SafetyImprove Work Zone Safety•AGC sought to protect industry’s workers AGC sought to protect industry’s workers and the public by increasing awareness and the public by increasing awareness and commitment to work zone safetyand commitment to work zone safety

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AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

INFRASTRUCTURE INVESTMENT – INFRASTRUCTURE INVESTMENT –

DRINKING AND WASTEWATERDRINKING AND WASTEWATER

•Over next 20 years:Over next 20 years:•Drinking water investment needs Drinking water investment needs between $70 billion - $362 billion. between $70 billion - $362 billion. •Wastewater investment needs Wastewater investment needs between $132 - $388 billion.between $132 - $388 billion.

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AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

INFRASTRUCTURE INVESTMENT – INFRASTRUCTURE INVESTMENT – WATER RESOURCESWATER RESOURCES

•Water resources projects not Water resources projects not keeping pace with economic and keeping pace with economic and social expansionsocial expansion•Waterways programs grow U.S. Waterways programs grow U.S. economy:economy:

•Every $1B expended = 40,000 jobs.Every $1B expended = 40,000 jobs.•Flood damage reduction provides a Flood damage reduction provides a six-to-one return.six-to-one return.•O&M on locks and dams provides 14-O&M on locks and dams provides 14-1 return.1 return.

•AGC focused to increase federal AGC focused to increase federal investment.investment.

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AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

REVERSE AUCTIONSREVERSE AUCTIONS

•AGC working with Congressional Leaders AGC working with Congressional Leaders to prohibit procurement of Federal to prohibit procurement of Federal construction projects using Reverse construction projects using Reverse Auctions.Auctions.•House of Representatives has passed House of Representatives has passed legislation to accomplish this goal.legislation to accomplish this goal.•Senate expected to pass similar measure Senate expected to pass similar measure this fall.this fall.

Building Your Quality of Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

TAX POLICYTAX POLICY

• House of Representatives approved House of Representatives approved full and permanent repeal of “death full and permanent repeal of “death tax.”tax.”

• Death tax scheduled for elimination Death tax scheduled for elimination in 2010.in 2010.• Full repeal expires in 2011.Full repeal expires in 2011.

• AGC urging Senate to schedule AGC urging Senate to schedule similar vote.similar vote.

• The President has repeatedly The President has repeatedly stated his desire to sign this stated his desire to sign this legislation.legislation.

Building Your Quality of Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

ENVIRONMENTENVIRONMENT

•AGC and U.S. Environmental AGC and U.S. Environmental Protection Agency partnering:Protection Agency partnering:

•Goal: Reduce regulatory burdens and Goal: Reduce regulatory burdens and improve compliance.improve compliance.

•AGC responded to numerous AGC responded to numerous proposals impacting construction.proposals impacting construction.•AGC offers services promoting our AGC offers services promoting our positive contributions to positive contributions to environmental stewardship.environmental stewardship.

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AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

TORT REFORMTORT REFORM

•67 companies forced into bankruptcy 67 companies forced into bankruptcy because of asbestos litigation.because of asbestos litigation.

•500,000 employees have lost jobs.500,000 employees have lost jobs.•Between $375 and $650 billion in stock Between $375 and $650 billion in stock value evaporated.value evaporated.

•AGC supporting legislation to address AGC supporting legislation to address litigation challenges.litigation challenges.

Building Your Quality of Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

SAFETY & HEALTHSAFETY & HEALTH

•AGC & OSHA working on Trenching AGC & OSHA working on Trenching Initiative Task Force.Initiative Task Force.•OSHA proposing silica, hexavalent OSHA proposing silica, hexavalent chromium, & confined space chromium, & confined space standards.standards.•Negotiated Rulemaking for Cranes & Negotiated Rulemaking for Cranes & DerricksDerricks

•OSHA preparing final consensus OSHA preparing final consensus languagelanguage

•OSHA Susan Harwood Training GrantOSHA Susan Harwood Training Grant•Fall Protection Training - 1,500 people Fall Protection Training - 1,500 people trained to datetrained to date•Every AGC General Contractor sent CD-Every AGC General Contractor sent CD-Rom (10,000)Rom (10,000)Building Your Quality of

Life

AGC Legislative and AGC Legislative and Regulatory GoalsRegulatory Goals

IMMIGRATION REFORMIMMIGRATION REFORM

•Shortage of skilled and unskilled Shortage of skilled and unskilled workers in construction must be workers in construction must be addressed.addressed.•Streamline legalization process:Streamline legalization process:

•Need workable and realistic guest worker Need workable and realistic guest worker program.program.•Today’s immigrants are highly skilled and Today’s immigrants are highly skilled and provide a valuable serviceprovide a valuable service

•Congress has introduced legislation to Congress has introduced legislation to reform the system.reform the system.

•Action expected in the fall of 2005 and Action expected in the fall of 2005 and will probably continue into 2006.will probably continue into 2006.

•AGC continues to work with AGC continues to work with Congressional leaders to develop a Congressional leaders to develop a reasonable and workable guest worker reasonable and workable guest worker program.program.

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U.S. Economy and U.S. Economy and ConstructionConstruction•Construction A Major Part of U.S. Construction A Major Part of U.S. Economy:Economy:

•7.3 million workers in 700,000 7.3 million workers in 700,000 companies.companies.•2 million firms operate without 2 million firms operate without employees.employees.

•12% of all non-employer firms.12% of all non-employer firms.•Value of construction put in place in Value of construction put in place in 2004 totaled $1 Trillion2004 totaled $1 Trillion

•8% of GDP.8% of GDP.•Construction machinery shipments Construction machinery shipments exceeded $500 billion in 2004exceeded $500 billion in 2004

•11% of all manufacturing shipments.11% of all manufacturing shipments.

Building Your Quality of Life

U.S. Economy and U.S. Economy and ConstructionConstruction•Construction has Done Well in 2005:Construction has Done Well in 2005:

•Construction employment rose by Construction employment rose by 277,000 from August 2004 to August 277,000 from August 2004 to August 2005.2005.

•A new recordA new record•Value of construction put in place rose Value of construction put in place rose nearly 9% in the seven months of nearly 9% in the seven months of 2005.2005.•Year-to-date orders for construction Year-to-date orders for construction materials, supplies, and machinery are materials, supplies, and machinery are all upall up

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U.S. Economy and U.S. Economy and ConstructionConstruction• All Segments Grew in the First All Segments Grew in the First

Seven Months of 2005:Seven Months of 2005:• Private residential construction Private residential construction

put in place rose 12% over same put in place rose 12% over same period last year.period last year.

• Private nonresidential Private nonresidential construction grew 5%.construction grew 5%.

• Public construction rose 6%.Public construction rose 6%.• However, these gains are only However, these gains are only

partly real.partly real.• Steep price increases for steel Steep price increases for steel

and many other inputs reflected.and many other inputs reflected.

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U.S. Economy and U.S. Economy and ConstructionConstruction

Remainder of 2005 and 2006 will be affected by impacts of Hurricane Katrina:

•The cost of diesel fuel to operate equipment and trucks and pay for deliveries of materials will eat into profits.

•Oil and natural gas price increases and shortages will affect asphalt, plastics, roofing and insulation.

•Cement and labor shortages could become more widespread.

Building Your Quality of Life

U.S. Economy and U.S. Economy and ConstructionConstruction•There will be lots of stabilization, repair, and demolition work.

•Reconstruction will depend on funding and decisions about whether rebuilding is safe and sensible.

•Other regions will grow a bit faster as families and businesses relocate.

•Higher gas and heating costs will force consumer cutbacks, hurting some types of construction.

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The Associated General Contractors of The Associated General Contractors of AmericaAmerica

Building Your Quality of Life