The Voice of America’s Engineering Industry Federal Legislative and Regulatory Update for ACEC-Pennsylvania Katharine Mottley Director of Tax & Regulatory Affairs ACEC March 11, 2015

The Voice of America’s Engineering Industry Tax Reform Former Chairman Camp’s legislation may provide ideas but new committee leaders want to pursue their own approaches to tax reform Need to read the tea leaves from the President, new Ways and Means Chairman Paul Ryan (R-WI), and new Senate Finance Chairman Orrin Hatch (R-UT)

The Voice of America’s Engineering Industry Tax Reform: President’s Budget Priorities: HTF, corporate tax reform, tax relief for lower/middle income people Key provisions Tax on overseas profits to help pay for $478 billion highway bill No proposal for long-term financing of HTF Provides for lowering top corporate rate from 35 to 28 percent; no equivalent drop in tax rate for passthroughs Cash accounting expansion

The Voice of America’s Engineering Industry Tax Reform: President’s Budget Key provisions R&D tax credit permanent Section 179 expensing permanent at $1 million Section 179D permanent SECA tax on owners/partners of professional services S corps and partnerships Eliminates oil and gas benefits, reinstates Superfund excise taxes Expands estate tax, increases taxes on high- income individuals

The Voice of America’s Engineering Industry Tax Reform: Senate Finance Chairman Hatch: comprehensive tax reform a top priority Established bipartisan working groups Business income; individual income; savings & investment; international; community development & infrastructure Currently receiving input Directed to provide legislative recommendations by end of May Timeframe suggests short-term HTF extension

The Voice of America’s Engineering Industry Tax Reform: Ways and Means Chairman Ryan stated a preference for comprehensive tax reform Ryan: addressing the individual side of the tax code not possible this year, but business tax reform possible if finished by the summer (presidential election cycle) Unclear what business tax reform means No gas tax increase and no repatriation outside of tax reform – unclear how HTF will be funded

The Voice of America’s Engineering Industry Tax Reform: ACEC Priorities Comprehensive tax reform that treats all business structures equally Sustainable financing for HTF Protect key provisions, such as cash accounting, Section 199 Defend against tax increases such as the S corp payroll tax

The Voice of America’s Engineering Industry SEC Municipal Advisor Rule Section 975 of Dodd-Frank requires “municipal advisors” to register with the SEC and the MSRB Municipal advisors provide advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products (e.g. derivatives) or the issuance of municipal securities, including advice with respect to structure, timing and terms

The Voice of America’s Engineering Industry SEC Municipal Advisor Rule Firms can choose to register, and comply with associated regulations Firms can rely on the exemptions in the rule Engineering exemption General information Responding to RFP/RFQ Independent registered municipal advisor exemption

The Voice of America’s Engineering Industry FLSA Overtime Pay Rule President directed DOL to update rule that determines which employees must be paid time and a half for hours worked over 40 per week Current threshold below which overtime must be paid: $455 per week/$23,660 per year Expected threshold: between $40,000 and $50,000 per year Rule may limit the use of exemptions (e.g. professional, administrative, executive) unless 50% of employee’s duties are covered by an exemption

The Voice of America’s Engineering Industry AASHTO audit guide Updated 2015 National Compensation Matrix published by the joint AASHTO-ACEC NCM Taskforce ( -- 3% escalation on the 2014 NCMhttp://audit.transportation.org/ 2016 NCM will be full refresh with new survey data ACEC currently engaging with AASHTO on full- scale update to the 2012 Audit Guide -- major issues include (but not limited to) treatment of uncompensated overtime, bonuses, vehicle costs, and labor testing

The Voice of America’s Engineering Industry AASHTO audit guide 2015 AASHTO Audit Subcommittee Conference July in Portland, OR Questions and issues can be directed to Vivian Moeglein at or

The Voice of America’s Engineering Industry Questions Q&A Contact information: Katharine Mottley Director of Tax & Regulatory Affairs American Council of Engineering Companies (202)