Engineering Inc. - January/February 2005 - 7

ther toward addressing the funding gap business for the 109th Congress when
it convenes in January. than current funding levels. WRDA authorizes
funding for the Army Corps of Engineers' flood control, navigation and
environmental restoration projects. Bush Promises Major ACEC and industry
allies have been urging Congress to complete Tax Reform work on WRDA,
which has been delayed over several environmental Corps reform measures,
including independent review of feasibil- President Bush has declared that
simplifi- ity reports and revision of the Corps' planning process. House
and cation of the tax code is one of the major Senate negotiators have
made some progress in resolving differences goals of his second term. A
bipartisan tax in this area, and there's hope that a new WRDA package will
clear commission appointed by the president will begin its consideration of
proposals, Eric Flicker, Pennoni Congress early in the new session.
including options such as a consumption- Associates, Inc. In related news,
ACEC and a larger industry coalition the Water Infrastructure Network WIN
plan to launch a new effort in based tax or a flat tax, early in 2005 and
2005 to increase federal funding for the Clean Water and Safe will then
make recommendations to the Department of the Treasury. Dr i n k i n g
Water State Revolving Loan Fund SRF programs. While simplification of the
tax code will be a major priority, Presi- Funded at about $2 billion
annually, these programs represent the dent Bush also will likely propose
other tax provisions in his fiscal majority of the federal investment in
drinking water and wastewater year 2006 budget, which is to be released in
early February 2005. infrastructure. House and Senate committees passed two
significant The tax cuts enacted in Bush's first term including the repeal
of the SRF funding bills during the past year, but they stalled over
differ- death tax and lowering tax rates on capital gains and dividends to
15 ences over whether the federal Davis-Bacon prevailing wage law percent,
which benefits S corporations will expire by 2011, at the applies to
SRF-funded projects. latest. The president has been urging Congress to
make these tax In addition to increasing funding for the SRF programs,
ACEC cuts permanent. and WIN are working on new legislation to create a
dedicated trust Making the tax cuts permanent makes a great deal of sense,
said fund to support water infrastructure projects across the nation, simi-
Former ACEC Chairman Eric Flicker of Pennoni Associates, Inc. If lar to the
approach taken with the federal highway and aviation pro- Congress can take
action to eliminate the uncertainty over these pro- grams. The legislation,
which also will require the use of qualifica- visions, it makes it easier
to do the kind of long-term planning that tions-based selection for
federally funded projects, will call for a growing companies need to do to
ensure success. dedicated water infrastructure revenue stream that goes
much fur- ACEC is supportive of extending these tax benefits, and also is
engaged in other tax issues on behalf of the industry, including Tort
Reform Prospects to Improve in 2005 securing passage of legislation to
preserve the ability of A/E firms to use cash accounting. Congress is
expected to take action early in the 2005 session on legislation to reform
class-action lawsuits, asbestos litigation and ACEC Urges Treasury Dept. to
Adopt Broad medical liability. A/E Services Definition for 9 Percent Tax
The House, in particular, made progress on a number of legal Benefit
reform bills in 2004, but the effort lost steam in the closely divided
Senate. One positive sign: The As the Treasury Department begins
development of regulations for new Democratic leader in the Senate, the
American Jobs Creation Act H.R. 4520 A/E tax benefit, ACEC Harry Reid
D-Nev. , has said he is working to ensure that the agency adopts broad
definitions of believes that Congress should pass leg- engineering
services that will qualify for the new tax deduction. islation that
addresses class-action law- The regulations will provide a 9 percent
deduction for A/E firms suits and medical malpractice cases. for income
derived from A/E services performed in the U.S. for ACEC and other
business groups see domestic construction projects. The deduction will be
phased in gains in these areas as leading to over six years. broader
reforms, including so-called Broad regulatory definitions of engineering
services and construc- Chuck Kopplin good samaritan protections, reason-
tion projects would maximize the benefit to A/E firms and simplify Graef,
Anhalt, Schloemer able caps on liability and reform of the record keeping
and reporting requirements. & Assoc., Inc. joint and several liability. In
a letter to the Treasury Department, ACEC President Dave Tort reform is
long overdue, said Raymond urged incorporation of broad definitions
already in use in Chuck Kopplin of Graef, Anhalt, Schloemer & Associates,
Inc. t h e Foreign Sales Corporation FOR MORE NEWS and the chairman of the
Risk Management Committee. Exces- FSC tax regulations repealed by sive
liability continues to be a major concern for the design com- H.R. 4520,
pointing out that use For weekly legislative news, munity, and it's
important for policy makers at the state and fed- of existing definitions
would sim- visit ACEC's Last Word online eral levels to respond to this
problem. plify the task of implementation. at www.acec.org. 7 J a n u a r
y l February 2005 ENGINEERING INC.
http://www.acec.org
Engineering Inc. - January/February 2005

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