Engineering Inc - July/August 2019 - 9

ACEC and Coalition Partners
Urge Action on Infrastructure
Legislation, Increase in Gas Tax

CEC, along with a coalition of more than 40 national
business and labor groups, sent a letter to President
Trump and congressional leaders urging them to
resume action on infrastructure legislation this year.
"Americans have suffered under the weight of our aging,
failing infrastructure for far too long," the letter states.
The letter goes on to list the ways in which infrastructure
legislation could boost productivity, make communities safer
and ensure economic success.
"That is why business and labor groups have come together
and proposed a funding solution: raising the federal gas tax,"
the letter says. "Democrats and Republicans in blue, red
and purple states across the country have already taken this
action, increasing their state gas taxes to finance their share
of much-needed infrastructure improvement.
"Infrastructure, especially our nation's roads, bridges and
transit systems, is a shared responsibility between the states
and the federal government. States are doing their part. It is
time elected leaders in Washington do the same."

ACEC Advocating
Movement on Tax Extenders

he House and Senate are taking steps toward extending
several expired tax provisions although final resolution
remains unclear.
In May, the Senate Finance Committee established
several task forces to examine the provisions commonly known
as the tax extenders. ACEC submitted comments supporting a multiyear extension of the Section 179D energy-efficient
commercial buildings tax deduction and the Section 45
production tax credit for renewable resources. These provisions
were part of the legislative agenda during the ACEC Annual
Convention and fly-in.
The House Ways and Means Committee acted in June,
approving legislation that would reinstate the expired tax
extenders for 2018 through 2020 and extend provisions expiring
later this year. The bill would also expand the earned income tax
credit for low-income working individuals.
In order to offset the cost of the legislation, the Ways and
Means bill would accelerate a reduction in the estate tax
exemption from the end of 2025 to the end of 2022. Final action
on the tax extenders is not expected until later in the year and
could be combined with budget legislation.

ISSUES ON THE MOVE WHAT'S NEXT
Transportation
Appropriations

Senate action expected in September

Tax Extenders

House floor action in September,
Senate committee action in
the fall

FHWA Finalizes Guidance
on New 'Safe Harbor'
Indirect Cost Rate Policy
for New and Small Firms

he Federal Highway Administration (FHWA) is
expanding and making permanent a "safe harbor"
indirect cost rate policy for state departments of
transportation.
The agency had conducted a three-year pilot study of a
safe harbor rate in 10 states. Based on the positive results
reported, the program will be made available to every state.
The basic concept is to allow new, small and Disadvantaged
Business Enterprise firms without a compliant Federal
Acquisition Regulation (FAR) overhead rate to voluntarily
use an artificially low rate while they develop a cost history
and adequate accounting systems.
The policy is designed to enable more firms to compete
for work and eventually transition to a FAR-compliant rate.
It also allows DOTs to allocate limited audit resources to
more complex, higher-risk contracts.
The FHWA notice is not a change in the underlying
regulations; it is policy guidance issued to state DOTs.
A safe harbor indirect cost rate policy would be one
component of a DOT's risk-based oversight process.
Agencies using the safe harbor indirect cost rate would
be required to develop written policies establishing the
program and oversight procedures designed to provide
reasonable assurance of consultant compliance with the
federal cost principles in accordance
with 23 CFR 172.11(c).
While the pilot program set the safe
harbor rate at 110 percent, the final
guidance gives states discretion to set
their own rate.
For
FHWA acknowledged and responded
More
to the input that ACEC provided on
News
the initial proposal. FHWA accepted
For
the Council's recommendation that a
legislative
safe harbor rate could be available for
news, visit
field-based contracts. The guidance also
ACEC's Last
repeatedly makes clear that acceptance
Word blog
and use of a safe harbor rate is voluntary
at www.
for firms, a point that ACEC strongly
acec.org.
emphasized, and that agencies must also
still comply with all federal, state and
local laws and regulations on federally
funded projects.
JULY / AUGUST 2019

ENGINEERING INC.

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Engineering Inc - July/August 2019

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