Fly-in Feature - ASA Priorities for 2024
As the American Subcontractors Association (ASA), a pivotal entity in the construction industry, representing over 2,400 construction subcontractors across the United States, prepares for its 2024 legislative fly-in on Capitol Hill, these are its legislative priorities aimed to address critical issues that impact subcontractors and by extension, the broader construction sector, who play an essential role in construction projects.
Promoting Prompt Payments through Legislative Action
A core issue for the ASA in 2024 is the enforcement of prompt payment to subcontractors and suppliers, especially concerning change orders. The organization supports the "Small Business Payment for Performance Act of 2023" (H.R. 2726), which mandates quick payment for contractors following change orders. Timely payments are vital to maintaining cash flow for subcontractors, ensuring they can meet their financial obligations and maintain stability in their operations.
Enhancing P3 Bonding Requirements
ASA champions H.R. 1740, which seeks to affirm that existing payment and performance security requirements extend to infrastructure projects financed through the Water Infrastructure Finance and Innovation Act (WIFIA), including Public-Private Partnerships (P3s). This legislation is crucial for surety professionals as it upholds stringent bonding requirements, ensuring that all parties are adequately protected in large-scale infrastructure projects.
Reforming Retainage Practices
Another significant focus is the reform of retainage practices. The ASA advocates for reducing the maximum retainage rate from 10% to 5%. High retainage rates can strain subcontractors who must front the cost of labor and materials, impacting their liquidity and financial health. This change would alleviate financial pressure and improve the economic conditions for subcontractors.
Ensuring Fairness in Bid Listing
The ASA supports the "Stop Unfair Bid Shopping Act" (SUBS Act), which mandates that general contractors on federal construction contracts valued at over $1.5 million list the subcontractors for work valued at more than $100,000. This act aims to curb bid shopping, promoting fairness and transparency in the procurement process, thereby protecting subcontractors from being undercut after bidding.
Streamlining Permitting Processes
The ASA continues to advocate for streamlining project review and approval processes through the "One Federal Decision" framework and other enhancements under the Infrastructure Investment Jobs Act (IIJA). Simplifying these processes can reduce delays and costs, benefiting the entire construction timeline and reducing risks associated with surety bonds.
Tax Reform
In advance of large scale tax legislation that will be forthcoming in 2025, ASA supports the following provisions:
- the repeal of the Corporate Transparency Act or, at the least, support modifications that ease the regulatory compliance burdens on small business;
- passage of the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024). Specifically, support for the business tax provisions of Title II of H.R. 7024 which provide for R&D benefits as well as extended bonus depreciation with increased limits on business expensing for certain assets; and
- the tax working groups of Congress as they prepare for the expiring provisions of the Tax Cuts and Jobs Act of 2017 (TCJA). Specifically, we support the renewal of the Qualified Business Income Deduction (199A) and all extension of the provisions related to business succession planning (e.g., increased estate and gift tax limitations).
Supporting Workforce Development
Workforce development remains a priority, with the ASA supporting apprenticeship funding opportunities and opposing the misclassification of workers as independent contractors. Strengthening the workforce is essential for the growth and sustainability of the construction industry.
Encouraging Construction Procurement Reform
Lastly, the ASA supports the House Construction Procurement Caucus, focusing on improving construction procurement policies. This caucus serves as a platform for addressing issues that affect the construction industry and ensuring that procurement practices are equitable and efficient.
These legislative priorities not only address the immediate needs of subcontractors. By supporting these initiatives, the ASA helps create a more predictable and fair business environment for all stakeholders in the construction industry.