June 2000

• House votes to scrap estate tax

• House clears FY 2001 transportation appropriations bill

• Supreme Court to review constitutionality of EPA regs

• Quality Growth Web site adds chat-room feature

• Oregon issues revised multistate wheel-loader bid

• New FMCSA hours-of-service rule threatens to undermine construction industry

• Election Outlook 2000: Who's the favorite son?

In a move that surprised even the most ardent supporters of estate tax repeal, the House of Representatives voted June 9 to give overwhelming approval to a bipartisan bill that would eliminate the estate tax during a 10-year period by gradually drawing down tax rates. The final vote on the Death Tax Elimination Act (H.R. 8), which was introduced jointly by Rep. Jennifer Dunn (R-Wash.) and Rep. John Tanner (D-Tenn.), was 279 to 136. Ultimately, 65 Democrats defied their party's leadership and supported the elimination of the estate tax. Although the bill fell 11 votes short of the 290 needed to override a veto, 11 of the 20 House members who weren't present or didn't cast a vote have cosponsored the legislation, suggesting that supporters might be able to muster the votes necessary to enact the legislation without Clinton's approval.

AED, AGC, CIMA unite in estate-tax lobbying blitz

In the final days leading up to the vote, AED mounted a lobbying blitz along with the Associated General Contractors and the Equipment Manufacturers Institute to educate members of Congress about the disproportionate toll of the estate tax on family businesses in the construction industry. Our effort involved sending each member of the House a toy piece of construction equipment and a poster prepared by AED that illustrated the prices of various equipment pieces.

The lobbying kit's theme was that the construction industry is very capital intensive-just a few pieces of equipment can consume a business owner's $675,000 estate tax exemption. Members of Congress were also provided with details of AED's estate tax study, which found that the equipment-distribution industry alone has spent more than $5 million on estate plans to ensure the family business' survivability, and that distributors spend more than $6.6 million annually on life-insurance premiums so that there is sufficient cash on hand to pay the tax when it's due.

Repeal efforts given new momentum

Although the Senate has no plans to take up estate tax repeal in the immediate future, and the President has promised to veto any repeal bill that reaches his desk, the House vote has given new life and energy to groups supporting estate tax repeal. A Senate companion bill to H.R. 8 was introduced last year by Sen. Ben Nighthorse Campbell (R-Colo.) and currently has 15 cosponsors. We're hopeful that the overwhelming show of support for repeal by representatives of both parties will spur consideration of Sen. Campbell's bill (S. 38). AED members should contact their senators immediately and urge them to seize this historic opportunity to make estate tax repeal a reality.

I'm reminded of April 1996, when the House passed legislation to take the Highway Trust Fund off budget by a similar margin. The president had promised a veto and the Senate refused to take up the issue. Two years later, the Transportation Equity Act for the 21st Century was signed into law with a provision that afforded the HTF the protection we wanted. We didn't lose hope in 1996, and we kept fighting. And, in the end, we won.

The House of Representatives last month gave its approval to the fiscal year 2001 transportation appropriations bill. The legislation, which would provide more than $55 billion for highways, transit, airports and other programs overseen by the Department of Transportation, passed the House by a vote of 395 to 13 on May 26.

The bill would fund the core federal highway program at more than $29.6 billion, a $2 billion increase over the amount provided in FY 2000. Most important, the funding levels for highways in the bill represent the full amount promised for the road program in the Transportation Equity Act for the 21st Century, the legislation enacted in 1998 that provides the blueprint for highway investment.

Senate controversy expected

The focus now shifts to the Senate, where the Transportation Appropriations Subcommittee was expected to take up its version of the legislation during the week of June 13 and bring a bill to the floor during the week of June 19. Although the Senate is expected to approve the transportation bill in relatively short order, a number of issues have arisen in recent days that may make the debate over the Senate bill more heated.

One amendment to the bill proposed by Sen. George Voinovich (R-Ohio) would allow Highway Trust Fund money to be used for subsidizing Amtrak. The Voinovich proposal, which is expected to be offered as an amendment when the bill reaches the Senate floor, is vehemently opposed by Sen. Kit Bond (R-Mo.) and other Senate highway advocates.

Other potentially controversial issues expected to arise during the debate over the transportation bill in the Senate include a proposal by Sen. Frank Lautenberg (D-N.J.). This would tighten drunk-driving standards and language that may be included in Transportation Appropriations Subcommittee Chairman Richard Shelby's (R-Ala.) "chairman's mark" of the bill to impose a one-year delay on efforts by the Federal Motor Carrier Safety Administration to change the hours of service rules for commercial drivers.

The Supreme Court May 22 granted certiorari in the case brought by the construction industry and others challenging the new ozone and particulate matter standards proposed by the Environmental Protection Agency in 1997. The high court's decision means that later this year or early next year, the justices will hear oral arguments in the case and review the May 1999 decision of the U.S. Court of Appeals for the District of Columbia Circuit, which upheld the decision of the district court and found that the EPA standards did not pass constitutional muster.

On May 31, the Supreme Court announced that it was expanding its review of the case and that in addition to examining the constitutionality of the regulations, the court would examine whether the EPA must take into account the costs of complying with the regulations when devising new standards.

The case has major significance for the construction industry and the nation as a whole. The EPA rules, which many argue are not supported by good science, would cost the U.S. economy an estimated $100 billion annually and would bring road construction to a standstill in many areas of the country. The regulations threaten to throw many cities into nonconformity with federal air standards, thereby threatening their eligibility for federal highway funds. An analysis by the American Road and Transportation Builders Association, which is representing the construction industry in the case, suggests that as much as $12 billion in federal highway funds would be at risk if the regulations were enforced.

The Supreme Court's final decision in the case is expected next year.

A year and a half ago, when AED and our construction industry allies learned that the Environmental Protection Agency was giving grants to environmental groups to fight road projects around the country, we developed a multipart strategy to address the threat these groups posed to the federal highway program.

The first part of our strategy was bringing the EPA's Transportation Partners Program to the attention of lawmakers on Capitol Hill by making them aware that taxpayer money was being used to undermine the implementation of the Transportation Equity Act for the 21st Century. As it turns out, many members of the House and Senate-both Republicans and Democrats-were as irked about the EPA program as we were. The pressure they put on EPA resulted in the demise of the Partners Program last summer.

But we're not naive. No one in the construction industry believed that the environmental movement was walking away from its crusade against growth and road-based mobility because the EPA was no longer paying the bills. Therefore, the second part of our strategy focused on developing tools for AED members and others in the construction industry to use so that they themselves could get engaged in the growth debate in their communities. The fruit of our labors, a policy manual in notebook form titled Building Better Communities: A Toolkit for Quality Growth, was released earlier this year. It provides both factual information about growth issues and a blueprint for how to best advance a balanced growth agenda in your community.

But to be of real value to AED members, it's important that the toolkit is current and that new developments in the growth debate be addressed. To do so, we recently launched http://www.qualitygrowth.org/. Site users can access the toolkit in PDF format as well as press releases and other related documents.

This month, we've added an exciting new feature to make the site even more useful-a chat room. AED members and other site users now have the opportunity to post comments about the toolkit and the growth issue in general, as well as questions about issues addressed (or not addressed) in the toolkit. AED, the site administrator, will ensure that your questions and comments are answered by individuals with expertise in urban growth, environmental policy and planning.

We hope that the Quality Growth Forum will become a key resource for AED members engaged in the growth debate in their communities and a central point to discuss growth policies that have and have not worked. Visit the site and take a look.

The state of Oregon last month reissued its "invitation to bid" to provide wheel loaders and tool carriers to Oregon and several other western states participating in the multistate bidding initiative. Probably the most important change to the bid document, which was originally released March 7, is that Utah and Idaho have withdrawn from the multistate bidding arrangement under political pressure. Nevada, New Mexico and Arizona are still participating.

Other changes to the bid document include:
• A statement directing potential bidders to purchase their copy of the invitation to bid directly from Oregon's Department of Administrative Services. As a service to our members, AED's Washington office obtained the invitation to bid and provided copies of the document and subsequent addenda to our members in the affected states. Members are cautioned, however, that with the issuance of the new bid document, Oregon may refuse to accept a bid from any party that did not purchase the invitation to bid directly from the state. According to the document, failure to respond using the newly issued invitation to bid will apparently "result in bid rejection." Copies of the invitation to bid may be purchased by calling Larry Wright in the Oregon DAS at (503) 373-1467.
• A provision allowing for bids by consortiums and partnerships. The addendum provides that the states will now consider bids by multiple firms that have joined together in a formal agreement to provide the services contemplated in the original bid.
• A provision extending the time for submitting bids. The new closing date to submit bids is June 22, 2000.
• Bid response sheets for the individual states. The new bid document includes individual bid response sheets for each of the states participating in the program. AED's Washington office has been advised by the Oregon DAS that this was done to allow distributors to bid only on those states in which they can provide service and to allow the distributors to vary bids for each state. Allegedly this means that a distributor could win the bid only for the state in which they currently operate. However, we question the value of having bids for Arizona, New Mexico and Nevada being coordinated by a state several hundred miles away. AED members fighting the multistate bidding program in the participating states should raise this issue.

Despite the modifications to the bid, our original concerns remain about the western states cooperative bidding initiative-that it is a thinly veiled effort by the states to buy directly from the manufacturers and cut out distributors.

AED will continue to advise you of any developments related to the issue as well as provide assistance to any AED local group working to address the initiative in their state capitals. If you have any questions, don't hesitate to contact AED's Washington office.

AED has begun working with our construction industry allies in the Transportation Construction Coalition to address the Federal Motor Carrier Safety Administration's newly proposed hours-of-service regulations. The FMCSA rules, which were released for comment last month, would replace the federal rules currently in effect, which regulate on- and off-duty time for commercial drivers.

FMCSA's proposal would create five categories of commercial drivers ranging from long-haul truckers to drivers for whom driving is only incidental to their job and who spend less than five hours a day behind the wheel. Our concerns about the regulations include that they would eliminate the exception currently enjoyed by the construction industry, which permits a driver's "clock" to be reset after 24 hours off-duty if they operate within 50 air miles of their employer.

Additionally, states would no longer be allowed to impose looser hours-of-service rules for intrastate operations. There is general consensus that the new regulations, which would change the on- and off-duty requirements for commercial vehicle drivers, would increase costs for construction industry firms, increase the costs of construction projects and undermine the safety of workers doing road work.

Current lobbying efforts are focused on encouraging the Senate to include a provision in the FY 2001 transportation appropriations bill that would put a one-year moratorium on the codification of the new rules and encouraging the FMCSA to extend the deadline for filing comments on the proposal. Additionally, our coalition is working to develop an alternative proposal that would apply to firms that work in and supply the construction industry.

Even if all else fails, presidential candidates can usually count on the support of voters in their home states. Even Walter Mondale (D) won Minnesota despite his miserable showing nationally in 1984. So how do things look for the presumptive candidates this year? Gov. George W. Bush looks certain to crush Vice President Al Gore in Texas and take that state's 32 electoral votes. A recent poll gave Bush a 70 to 23 percent advantage in his home state.

For Democrats, things are far less certain for Al Gore in Tennessee. Although no recent poll results have been released, a survey taken in March (when Gore was running more strongly against Bush nationally) gave the favorite son only a 47 to 41 percent lead. In 1996, the Clinton-Gore ticket won by only two percentage points in the Volunteer State. Gore's apparent drift from Tennessee voters on issues such as gun control and tobacco (a major cash crop for the state) make it clear that Tennessee's 11 electoral votes are anything but a sure thing for Gore come November.