2015 Annual Convention & Legislative Summit Key Issues Preview Steve Hall Vice President, Government Affairs

The Voice of America’s Engineering Industry Key Priorities for ACEC’s Citizen Lobbyists  Sustainable funding for transportation  Passage of a comprehensive energy strategy  Tax Reform  Design-build procurement reform

The Voice of America’s Engineering Industry Key Issue – Sustainable Funding for Transportation Matt Reiffer Director, Transportation Programs

The Voice of America’s Engineering Industry Transportation MAP-21 extension expires May 31, Highway Trust Fund balance could be depleted in early summer, delaying or rationing payments to states. House and Senate committees drafting long- term reauthorization bills. Everything hinges on funding: $100 billion in new revenue needed for six-year bill at current levels plus inflation.

The Voice of America’s Engineering Industry

Funding Options 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 Freight charges Tolling Expanded use of P3s, bonding/debt instruments Revenues from repatriated foreign earnings General fund transfers

The Voice of America’s Engineering Industry Transportation Key Message Points: Infrastructure is the base for economic growth. Underinvestment, uncertainty hurt the economy. Short-term patches and budget gimmicks are fiscally irresponsible. There is a wide array of options for the long- term stability of the Highway Trust Fund. Requests to Lawmakers: Enact a long-term reauthorization with increased investments, sustainable revenues.

The Voice of America’s Engineering Industry Key Issue – Energy Steve Hall VP, Government Affairs

The Voice of America’s Engineering Industry Energy ACEC continues to advocate for an “all of the above” approach to energy. Agenda in 2015 has been dominated by the Keystone XL pipeline debate, which passed Congress to be vetoed by the President. Beyond Keystone, the House has also cleared legislation to expedite licensing for LNG export facilities (HR 351), and streamline regulatory process for natural gas pipelines (HR 161).

The Voice of America’s Engineering Industry Energy – Going Forward Both the House and Senate energy committees are developing comprehensive bills to update energy infrastructure and facilitate production. House plan – modernize electric grid, oil/natural gas pipelines; “energy diplomacy” to facilitate cross border links; boost the energy workforce; and increase efficiency. Senate plan – develop range of energy sources; modernize infrastructure; efficiency. Future of Production Tax Credits (PTCs) to promote renewable sources?

The Voice of America’s Engineering Industry Energy Key Message Points/Request to Lawmakers: America needs a comprehensive approach to energy, one that makes use of the nation’s traditional fossil fuel resources, as well as renewables; Maintaining support for Production Tax Credits for renewables is a key component of a balanced energy strategy.

The Voice of America’s Engineering Industry Key Issue – Tax Reform Katharine Mottley Director, Tax and Regulatory Affairs

The Voice of America’s Engineering Industry Tax Reform -- Overview International competitiveness driving tax reform U.S. has highest corporate tax rate in OECD Concern about firms reincorporating overseas New congressional tax-writing committee chairs have identified tax reform as a priority Ways and Means Chairman Ryan: business tax reform possible by the end of the summer Senate Finance working groups Plan released last year by former Ways and Means Chairman Camp likely to form the foundation of tax reform

The Voice of America’s Engineering Industry Tax Reform -- Key Points Enact comprehensive tax reform that treats all business structures equally. Protect the continued use of cash accounting for engineering firms. Reject higher payroll taxes on tax-compliant engineering firms structured as S corporations. Retain Section 199. Maintain the tax-exempt status of municipal bonds.

The Voice of America’s Engineering Industry Tax Reform – ACEC Position Key Message Points: ACEC supports a comprehensive approach to tax reform that benefits all firms. There will be tradeoffs, but certain tax provisions are critical for the industry. Requests to Lawmakers: Enact reform that treats all business structures equally. Protect key tax provisions for the engineering industry.

The Voice of America’s Engineering Industry Key Issue – Design-Build Procurement Reform Jessica Salmoiraghi Director, Federal Agencies and International Programs

The Voice of America’s Engineering Industry Design-Build Procurement Reform - Overview Design-build has become popular in the federal market, but there have been issues reported by Council members. Two-step design-build projects have grown to over 10 finalists One-step design-build projects have had competitions valued at more than $100 million There is no reporting on design-build procurements The FY ‘15 NDAA required military construction to use two-step design-build on projects over $4 million.

The Voice of America’s Engineering Industry Design-Build Procurement Reform -- Key Provisions Limits second phase design-build to five finalists Written report of any exceptions for civilian and military construction. Limits one-phase design-build to projects less than $750,000 for civilian and military construction. There is no cost to this bill. The construction industry supports these reforms.

The Voice of America’s Engineering Industry The Senate Bill is Broader than the House version Senators Portman (R-OH) and Cardin (D-MD) introduced a bill that includes design-build reforms. Also includes a limitation on the use of reverse- auctions in construction projects. Requirements that federal P3 projects include surety protections for subcontractors, real fungible assets must be used for sureties and increasing the guarantee under the SBA’s program.

The Voice of America’s Engineering Industry Design-Build Procurement Reform Key Message Points: Unlimited design-build competitions are expensive for the government and the industry Streamlining design-build is good for the industry and for the government as it saves both money Requests to Lawmakers: Sponsor House bill Senate bill

The Voice of America’s Engineering Industry Thank you! #ACEC2015