Engineering Inc. - May/June 2010 - (Page 7)

ACEC 9% Tax Deduction Is ‘Real Money’ for Members ACEC members continue to make good use of a special A/E tax deduction that allows engineering firms to take a 9 percent tax deduction for projects performed in the united States. Enacted in 2004, the deduction has been phased in over several years, from 3 percent in 2005 to 9 percent in 2010. It represents one of the Council’s most important legislative victories on behalf of its membership. “A few years ago, I touted the 3 percent A/E tax deduction as a ‘real money’ win from the ACEC national program,” said Christopher Borton, president of Bortonlawson in Wilkes-Barre, Pa. “the full 9 percent deduction this year is huge as compared to our ACEC dues,” he said. “through the efforts of ACEC, we are netting more cash for our firms, even after our dues.” K.C. Hill, CFO of Morrison-Maierle in Helena, Mont., said the credit has reduced his firm’s tax liability by 7 percent in qualifying years. “this has really helped our bottom line. All engineering firms should take a look at the credit, because it may be of significant benefit to them as well,” said Hill. “CH2M HIll uses and benefits greatly from the Section 199 tax deduction, even after considering the costs of compliance,” said John Bauer-Martinez, vice president of tax for CH2M HIll in Englewood, Colo. “I was delighted by the final regulations as they apply to engineering and construction.” IssuEs oN thE MovE Bipartisan Climate Change Bill 3% Withholding Repeal What’s NExt Possible senate action in the summer aCEC, industry allies working to include in larger tax package aCEC to monitor implementation closely New PLa Rules Bipartisan Climate Change Bill Hits Stumbling Block An effort by Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joseph Lieberman (I-Conn.) to craft a compromise approach to climate change hit a snag in April when Graham walked away amid reports that Senate Majority Leader Harry Reid (D-Nev.) would move an immigration reform bill first. Under the outlines of the compromise bill, the United States would cut greenhouse gas emissions by 17 percent in 2020 (compared with 2005 levels) and 80 percent by 2050. Pollution allowances for industries over the cap would be auctioned, with two-thirds of revenues generated returned to consumers. The bill includes loan guarantees and liability protection for new nuclear plants, as well as financial incentives for clean coal technologies and natural gas and electric vehicles. ACEC is urging the Senate to allocate all revenues derived from motor fuels to support transportation investments. In a letter to senators, ACEC and a coalition of two dozen transportation industry and labor groups stated that any revenue from such a “carbon tax” on fuel should be deposited into the Highway Trust Fund and not diverted for other purposes. “Enacting a new transportation bill quickly will be very difficult—if not impossible—should Congress approve legislation that diverts revenue from carbon-based fees from motor fuels away from transportation investment,” the letter explained. The bill also incorporates the text of S. 1462, bipartisan energy legislation approved last year by the Senate Energy & Natural Resources Committee, which includes a provision requiring utilities to acquire 15 percent of their energy from renewable sources. From right, Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) discuss a compromise on climate change legislation. ‘Retainage’ Now Optional In Federal A/E Contracts; ACEC Says Eliminate It ACEC has won a substantial change in the longstanding federal requirement that A/E contracts include a retainage of 10 percent of payments. Under the revised Federal Acquisition Regulation (FAR) policy adopted in April, retainage is no longer mandatory, but optional (up to 10 percent) and at the discretion of the federal contracting officer. The new rule states that no retainage is required if the contracting officer determines that the work performed by the firm is satisfactory. Additionally, withheld payments for A/Es are to be paid at the successful completion of the design contract; this will in many cases significantly reduce the time firms must wait for full payment. The new policy stems from an ACEC-backed recommendation included in the Small Business Administration’s Regulatory Review and Reform initiative in 2008, calling for the elimination of retainage as an unnecessary burden on cash flow and overhead. “While the new rule is a step in the right direction, we would like to see this practice eliminated altogether,” said ACEC President Dave Raymond. “The government has many other remedies for ensuring satisfactory completion that are less damaging to our businesses.” SCOtt J. FERREll/COngRESSIOnAl QuARtERly/gEtty IMAgES For More News For weekly legislative news, visit ACEC’s last Word online at www.acec.org. May / JuNE 2010 ENGINEERING INC. 7 http://www.acec.org

Table of Contents for the Digital Edition of Engineering Inc. - May/June 2010

Engineering Inc. - May/June 2010
Contents
From ACEC to You
News & Notes
Market Watch
Legislative Action
Noble Causes
2010 Engineering Excellence Awards
Engineering America’s Recovery: Highlights from 2010 Annual Convention
Members in the News
Business Insights

Engineering Inc. - May/June 2010