ACEC Deep South Convention Federal Issues Briefing Steve Hall Vice President

The Voice of America’s Engineering Industry The 113 th Congress 2013 mired in political gridlock, culminating in a government shutdown last Fall. Towards the end of the year, progress: Two-year budget deal replaced sequestration. Appropriations bill to implement the agreement passed by wide margins. Debt ceiling extension cleared to March Infrastructure continues to be the catalyst for bipartisan cooperation.

The Voice of America’s Engineering Industry Water Resources Reform and Development Act (WRRDA) Congress cleared the conference report for WRRDA: Senate vote 91-7, House Authorizes $12.3 billion in new Corps projects, includes reforms to streamline project delivery. Includes new innovative financing program (WIFIA) for water projects, expands QBS to the State Revolving Fund (SRF) program. Includes National Levee Safety Program, addresses liability concerns. Includes language to promote contracting out.

The Voice of America’s Engineering Industry Other Water Issues Water Trust Fund bill introduced (HR 3582). HR 4237, expands use of Private Activity Bonds (PABs) for water projects; will raise $5 billion per year to support water projects. Both White House and proposed House tax reform legislation propose to limit tax-favored status of private activity bonds and municipal bonds.

The Voice of America’s Engineering Industry Energy ACEC backs “all of the above” energy plan. Keystone XL Pipeline: State Dept EIS concluded no significant climate impact; Administration announced recently a further delay pending the outcome of litigation in Nebraska. “Keystone XL’s Absurd Delay” – Washington Post. S 2074/HR 2126, promotes energy efficiency in public, commercial buildings; cleared by the House, stalled in the Senate. 2-year extension for renewable energy tax credits under pending Senate legislation.

The Voice of America’s Engineering Industry Transportation Senate moved first to reauthorize MAP-21 – S approved in Committee: Six-year bill at current funding plus inflation. Maintains core programs and state formulas, adds news freight mobility program. $750 million per year for TIFIA; reestablishes state infrastructure banks. New $400 million per year program for Projects of National & Regional Significance. Mileage-based fee pilot study. Includes ACEC contracting out language.

The Voice of America’s Engineering Industry Transportation S 2322 is silent on funding source, will require over $100 billion in new revenues. Effort to pass multi-year reauthorization bill put aside to focus on short-term patch to shore up the Highway Trust Fund: Trust Fund balance depleted in August. Would result in delayed or rationed payments to states, projects being cancelled or postponed due to funding uncertainty. Short-term fix coupled with extension, either to year end or mid 2015.

The Voice of America’s Engineering Industry

Transportation – short-term House-passed solvency/extension bill (HR 5021), raises $10.8 billion to bolster the HTF and extends the program through May Financed through so-called “pension smoothing”, extension of custom duties, and transfer from the LUST Trust Fund. Senate to vote on companion bill next week; possible changes in financing package, effort by Senator Barbara Boxer to limit extension to December 19 th. “Devolution” amendment to be offered in Senate.

The Voice of America’s Engineering Industry Transportation -- long-term Increase / index existing gas tax Sales tax on gasoline or general sales taxes dedicated to transportation Energy-related revenues, e.g. offshore oil and gas royalties, federal lands leases Mileage-based fee (VMT) Tolling Expanded use of P3s, bonding/debt instruments Revenues from repatriated foreign earnings General fund transfers

The Voice of America’s Engineering Industry DOT FAR-Based Audit Rules Ongoing work with FHWA, State DOTs to ensure use of FAR cost principles for A/E audits. FHWA conducting a rulemaking to update federal regulations and improve compliance, may be finalized in the coming months. ACEC/FHWA training effort; sessions held in PA, MA, WI and Metro Washington, with other states in discussions. Engaging FHWA and affected firms on cost recovery process stemming from OIG audit.

The Voice of America’s Engineering Industry Tax Reform House Ways and Means Chairman Dave Camp (R- MI) released draft tax reform plan in the Spring: Reduces corporate top rate from 35% to 25%; individual rates drop from 39.5% to 25%, with a 10% surtax for upper income individuals ($400k) and families ($450k). $126.5 billion for the Highway Trust Fund through incentive to repatriate overseas corporate earnings. Imposes payroll taxes on S Corp distributions. Eliminates or limits other tax provisions of importance to engineering firms, including use of cash accounting, Section 199 (9% tax deduction), and limits tax-favored status of private activity bonds and municipal bonds. No action expected in 2014.

The Voice of America’s Engineering Industry Regulatory/Legal Issues New SEC rule on “municipal advisor” rule improved to include feasibility studies, cash flow modeling in engineering definition; ACEC seeking further clarification. Administration announced new effort to review Fair Labor Standards Act (FLSA) rules governing overtime, including raising the current $455 per week salary threshold below which overtime rules would apply, and other issues. Educating members on implementation of the health care reform law. Design-build, reverse auction reforms in NDAA.

The Voice of America’s Engineering Industry ACEC Political Program Essential to the success of the legislative program – helps to elect (and protect) lawmakers favorable to ACEC’s agenda. ACEC/PAC grew from $300,000 in 2002 election cycle to over $1.4 million in the 2012 cycle. Record fundraising in 2013 – over $770,000; over $500,000 already raised in Political program is integrated closely with legislative agenda to support key issues. Thank you for your support!

The Voice of America’s Engineering Industry Government Affairs Staff Steve Hall Vice President, Government Affairs Mark Steiner Senior Policy Director, Federal & International Programs Matt Reiffer Director, Transportation Vivian Moeglein Senior Policy Advisor, Transportation Charles Kim General Counsel Michael Grimes Government Affairs Manager Greg Knopp Executive Director, Political Affairs Cara Gavagan Director, ACEC/PAC Keith Pemrick Director, Environmental and Energy Programs Katharine Mottley Director, Tax and Regulatory Affairs