Engineering Inc. - March/April 2005 - 8

L E G I S L AT I V E AC T I O N TREASURY DEPARTMENT AGREES WITH ACEC ON A/E
TAX DEDUCTION; BUSH ASKS FOR ACEC SUPPORT ON TEA-21 Proposed Tax
Regulations Incorporate ACEC Provisions In a guidance released in late
January on the implementation of the new 9 percent A/E tax deduction
signed into law, which ACEC was instrumental in formulating, the Treasury
Department has now incor- porated ACEC's recommended definition of
engineering services, max- imizing the benefit of the bill's provisions
for engineering firms. Signed into law in November 2004 as part of the
American Jobs Creation Act H.R. 4520 , A/E firms will receive an income
tax deduction for engineering services performed in the U.S. of 3 percent
for 2005 and ramping up to 9 percent by 2010. As Treasury began work on
drafting regulations in December, ACEC President Dave Raymond urged the
department to incorpo- rate a broad definition of engineering services,
stressing that such a definition would simplify record keeping and
documentation require- ments and provide engineering companies with a
clear understanding Transportation Secretary Norm Mineta and ACEC
President Dave Raymond for planning purposes of what activities are
subject to the provision. at the White House The ACEC-recommended
definition includes any professional services requiring engineering
education, training and experience and the application of special
knowledge of the mathematical, physical or Rep. Young's reauthorization
proposal was introduced in mid- engineering sciences to those professional
services such as consulta- February, and also includes a re-opener
provision that would cut tion, investigation, evaluation, planning, design
or responsible super- off the flow of transportation funds after two years
to allow Congress vision of construction for the purpose of assuring
compliance with to revisit and possibly increase the funding level,
although this provi- plans, specifications and design. sion provoked a
veto threat from the Bush administration last year. ACEC currently is
reviewing the guidance and may provide addi- Young's legislation stills
leaves open the question of total contract tional comments to the Treasury
Department regarding the engineer- authority, which was set at $299 billion
during last year's negotia- ing tax benefit. Treasury will use this
guidance and the comments tions. House leaders have tentatively agreed on
the minimum guar- received to draft proposed regulations, which will be
released in the antee for each state the minimum percentage return each
state summer of 2005. To view the proposed guidance, go to http://www.
acec.org/advocacy/bill4520.pdf. Comments on the guidance are due ISSUES ON
THE MOVE WHAT'S NEXT March 31. ACEC-backed regulations to Final regulations
expected ACEC Reviews Higher TEA-21 Request at implement new 9 percent A/E
late spring White House Meeting tax deduction Pre s i d e n t's Bush's
fiscal year 2006 budget request to Congress includes $284 billion in
guaranteed spending for the next version of TEA -21 Reauthorization Floor
consideration expected TEA-21, a 35-percent increase over the current
program and a siz- backed by Bush at $284 in March able increase over his
initial reauthorization proposal introduced a billion year ago. ACEC
President Dave Raymond was asked to attend a Comment deadline April 3, SBA
Size Standards White House meeting in late February to discuss the
president's pro- 2005; final regulations posal, where Karl Rove and
Transporation Secretary Norm Mineta expected by summer asked for the
Council's support. In related news, House Transportation and
Infrastructure Com- mittee Chairman Don Young R-Alaska introduced a new
reau- Committee hearings in March ACEC-backed Association thorization
measure that matches the president's guaranteed spend- Health Plan
Legislation ing level and leaves open the possibility of higher spending
down the road. 8 ENGINEERING INC. M a r c h l April 2005
http://www.acec.org/advocacy/bill4520.pdf http://www.acec.org/advocacy/bill4520.pdf
Engineering Inc. - March/April 2005

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