Engineering Inc - November/December 2017 - 9

ACEC has raised serious concerns over the tax reform bill released
by the House Ways and Means Committee in early November,
mobilizing Member Firms around the country to contact lawmakers in opposition to the measure. In a letter to the House Ways and
Means Committee, ACEC emphasized that unless certain provisions concerning treatment of passthrough entities are changed,
ACEC will remain opposed to the bill.
The bill lowers the corporate tax rate from 35 percent to 20 percent and creates a new rate for the business income of passthrough
firms, such as S corporations and partnerships. The bill also preserves the ability of firms to use the cash method of accounting,
a key priority for the Council going into the tax reform process.
However, ACEC is strongly pushing back against language in the
bill that would exclude professional services firms-including legal,
medical, accounting, architectural and engineering firms-from the
lower passthrough rate. The measure also proposes to eliminate tax
credits and deductions, including the Section 199 deduction used
by many engineering firms, which could further increase the effective tax rate on engineering passthrough firms.
In a statement following the release of the bill, ACEC President
and CEO Dave Raymond said, "[The proposal] would create
serious inequities and competitiveness problems for thousands of
America's engineering firms, which are being excluded from the new
25 percent passthrough rate."
House leaders are pushing to complete work on the bill by
Thanksgiving. ACEC is working with lawmakers to secure more
equitable treatment for firms in all tax structures in the final product.
The Senate Finance Committee also released its tax reform proposal in early November. The proposal will lower the corporate tax
rate to 20 percent and apply the reduced rate to all industries. The
plan also creates a new 17.4 percent tax deduction specifically for
passthrough businesses to keep those firms competitive. As currently
drafted, only smaller engineering passthrough firms may qualify
for the new deduction, but the Council is working with senators to
make the deduction available to firms of all sizes.

ISSUES ON THE MOVE

WHAT'S NEXT

Administration's infrastructure
plan

Introduction expected in early
2018

Tax reform

Possible completion by
December 2017

FERC supply chain
cybersecurity standard

Approval expected in November

ACEC Engages Administration
on Infrastructure, Energy
Council President and CEO Dave Raymond and other
business leaders met with senior administration officials in
recent weeks to discuss President Trump's infrastructure
investment plans and energy agenda.
Jeff Rosen, deputy secretary of transportation, and D.J.
Gribbin, special assistant to the president for infrastructure,
reaffirmed the administration's commitment to an
infrastructure package that mixes direct federal funding with
incentives for state, local and private sector investment.
Raymond also participated in discussions with Energy
Secretary Rick Perry focused on regulatory reforms to
expedite energy project delivery. Additionally, Raymond
advocated for greater engineering participation on
cybersecurity working groups.
Energy Secretary Rick Perry

DREW ANGERER / STAFF / GETTY IMAGES

House Committee Tax Bill
Would Hurt Small Businesses;
Senate Releases its Proposal

Council Opposing Key Components
in National Defense Authorization Act

CEC is working on several
issues in the 2018 National
Defense Authorization Act
affecting the industry. The
Council is pushing back against
a renewed effort to reimpose the
"blacklisting" language in the bill,
after ACEC and industry allies
defeated a related executive order
from the previous administration
earlier this year. Sen. Elizabeth
Warren, D-Mass., has included
language in the bill that would impose
new reporting requirements relative to

OSHA violations during competition
and throughout the contract.
In addition, language introduced
in the House version would have
effectively rolled back ACEC-backed
design-build reforms introduced in
2015. The language would increase
the number of finalists in the indefinite delivery, indefinite quantity
design-build competitions by allowing
more than five finalists in the final
pool. Industry opposition to this bill
has been strong, and ACEC continues
to oppose these changes.

The Senate proposed a loosening
of temporary restrictions on publicprivate competitions that would
allow for the Defense Department
to compare costs on noninherently
governmental tasks with the private
sector. ACEC and industry allies have
been very supportive of eliminating
this restriction, which could allow
for more contracting out of commercially available services, including
engineering.
Congress is expected to wrap up
this bill by the end of the year.
NOVEMBER / DECEMBER 2017

For
More
News
For weekly
legislative
news, visit
ACEC's Last
Word online
at www.
acec.org.

ENGINEERING INC.

http://www.acec.org http://www.acec.org

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