A Hot Message From National AIA Advocacy

Memorandum
Date: April 30, 2007

To: AIA Board Advocacy Committee

From: Tom Wolfe

Subject: Status of Federal Legislative Initiatives


Per the request of the Board Advocacy Committee, I have generated a summary of the status of the various ongoing projects in the works at AIA Federal Affairs. Below I have laid these projects out in a rough order of the resources we are devoting to them and provided the requested status update:

Architect of the Capitol

The Architect of the Capitol (AOC) is in charge of the U.S. Capitol buildings and grounds, including the U.S. Supreme Court, the National Botanical Gardens and the Library of Congress. He/she is appointed by the President to a 10-year term from a slate of at least three nominees selected by a congressional selection commission whose membership is determined by law.

The current AOC’s term lapsed in February, although the incumbent – Alan Hantman – announced his intention not to seek a second term in August of 2006. Mr. Hantman’s primary legacy is the Congressional Visitors Center project which will increase the square footage of the Capitol Building by 80%. It has encountered many problems and is over budget and several years behind schedule. This, plus other criticisms of the current AOC office, have colored the opinions of the congressional staff (and some of their principals) associated with the Selection Commission regarding the most important qualifications to be sought in the next AOC.

The AIA has worked with the executive search firm retained by the Commission, as well as Commission staff to suggest qualified candidates and
reinforce the Institute’s primary objective – that the AOC must be a licensed professional architect. Current prevailing opinion among the Commission staff is that facilities management experience trumps all other factors and that credentials as an architect are only secondarily important, if important at all.

As the search firm narrows the universe of candidates that the Commission staff will interview, the AIA will meet with all Commission staff and all Commission members to reinforce the need for a licensed professional architect in the position. Some Grassroots assistance from the membership will be called for as well.

Federal Building Legislation

One our Grassroots sustainability “asks” was legislation that would require that all new buildings or major renovations owned or leased by the federal government to meet the AIA Board’s 2030 timetable for reductions in fossil fuel generated energy. RK Stewart testified before the Senate Energy Committee on February 12th on this issue. Subsequently, Senate Energy Committee staff asked the AIA for statutory language to accomplish this goal. We drafted and transmitted that language in March. In addition, throughout March & April we met with staffers for numerous Representatives and Senators seeking a sponsor for this legislation in both the House and Senate. On March 29th, Senator Hillary Clinton (D-NY) introduced our bill. Senator John Kerry (D-MA) is an original cosponsor. See:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:s1059is.txt.pdf

Buidling upon the Clinton bill, on April 16th Senate Energy and Natural Resources Committee Chariman Jeff Bingaman (D-NM) introduced comprehensive energy efficieny legisilation which includes the AIA-sponsored federal buildings policy position.
Bingaman’s legislation, the Energy Efficiency Promotion Act of 2007 (S. 1115), includes a provision (Section 506) that requires all new and extensively renovated federal buildings to use significantly less fossil fuel-generated energy than a similar building consumed in 2003. This provision reflects the AIA-recommended reduction targets for fossil fuel-generated energy use in new and renovated buildings, which, if adopted, would result in carbon neutral buildings by 2030.The AIA Government Advocacy team held numerous meetings with Energy and Natural Resources Committee staff in order to have our provision included in this fast-moving legislation. The Bingaman bill already has wide bipartisan support; cosponsors include committee ranking Republican Sen. Pete Domenici (NM), and Sens. Daniel Akaka (D-HI), Larry Craig (R-ID), Byron Dorgan (D-ND), John Kerry (D-MA), Amy Klobuchar (D-MN), Richard Lugar (R-IN), Robert Menendez (D-NJ), Lisa Murkowski (R-AK), Ken Salazar (D-CO), Bernard Sanders (D-VT) and Olympia Snowe (R-ME). The committee held a hearing on the legislation last week and mark-up will soon follow. It appears likely that this bill could be on the Senate floor before Memorial Day.

To see the bill, please follow this link:

http://energy.senate.gov/public/_files/EnergyEffPromotionAct.pdf

We are currently still seeking House sponsorship and have several very good leads. The House Public Buildings Subcommittee of the Transportation & Infrastructure Committee will hold a hearing on May 16th to address federal building energy efficiency. The AIA has been asked to testify.

We are also in discussions with Steven Winter Associates to produce an economic study of the costs and benefits to the federal government from attaining the energy reduction goals of the legislation.

Commercial Building Tax Deduction

The second of our Grassroots sustainability “asks” involved a specific bill -H.R. 539. This legislation was introduced in January by Rep. Allyson Schwartz (D-PA), as a result of AIA’s issue brief. It’s objective is to extend the tax deduction for builders of commercial buildings that exceed the ASHRAE energy efficiency stand 90.1 by 50% for 5 extra years & deepen the deduction from $1.80 / ft to $2.25 / ft. The bill now has 136 cosponsors including many key members of the Ways & Means Committee.

In late March, Senators Snowe (R-ME) and Feinstein (D-CA) introduced S. 822 and Reps. Markey (D-MA) and McDermott (D-WA) introduced H.R. 1385. These identical bills – called EXTEND legislation - would accomplish our goal for commercial buildings plus extend residential, appliances, solar equipment, etc tax breaks. The AIA supports this legislation as well.

On April 25, Senator Mary Landrieu (D-LA) introduced legislation which closely mirrors the Buildings for the 21st Century Act in the Senate. This legislation, the Green Buildings Act--Giving Reductions to Energy Efficient New Buildings (S. 1207) also extends the tax deduction unti 2013.

AIA Federal Affairs staff also submitted a Statement for the Record for the House Ways and Means Subcommittee on Select Revenue Measures regarding our support of extending and enlarging the Commercial Buildings Tax Deduction. We completed this at the behest of Rep. Schwartz.

In a related matter, the AIA has also met with IRS and DOE staff to press for IRS guidance on how the current tax deduction should be apportioned for public buildings. The law now grants the tax deduction, which cannot be claimed by a governmental entity, to be claimable by “the designer of the energy saving equipment.

Green Infrastructure

The third of our Grassroots sustainability issues involved amending the provisions of the Clean Water Act State Revolving Fund law (SRF) so that it encourages the use of SRF monies to fund “green infrastructure” projects to reduce the impact of stormwater runoff from the built environment on the water quality of adjacent water bodies (bays & rivers). Green infrastructure includes green roofs, parklands, swales, buffering vegetation and permeable pavement that lets stormwater infiltrate back to groundwater rather than runoff quickly and cause surges to combined sewage systems. So far we have spoken with both House & Senate committee staff regarding placing green infrastructure language in SRF reauthorization legislation that’s now moving in Congress.

The House SRF bill – HR 720 - has passed the House with our language in it in February. The Senate Environment & Public Works Committee is currently working on portions of SRF reauthorization. We will meet with committee staff to discuss this issue in greater detail over the next two weeks.

Historic Preservation / Community Enhancement

For the last two Congresses, the AIA has been working in coalition with the National Trust for Historic Preservation to revamp the current historic rehabilitation tax credits to make them work better with the low income tax credit and deepen the credit in “difficult –to-develop” areas. In past years this has been called the “Portman / Jefferson” bill and the “English bill”, in honor of the principal sponsors.

With the new leadership in this Congress, we have sought out Rep. Tubbs-Jones (D-OH) to be our new principal sponsor. Rep. Phil English (R-PA) will still be an aggressive cosponsor on the Republican side. The legislation is now H.R. 1043. It currently has 41 cosponsors.

In early April, I spoke with Rep. Richard Neal (D-MA) the chair of the Subcommittee on Select Revenue of the Ways & Means Committee (the subcommittee of jurisdiction) about moving H.R. 1043 in conjunction with the reauthorization of the Low Income Tax Credit, which is due to happen this year. Without making a commitment, he was supportive of the concept.


Federal Tax Matters

Last year’s tax bill created a monumental problem for small firms who contract with government entities. The governments (Fed, state, or local) would be required to withhold 3% of all payments to these entities in anticipation of federal taxes. This provision was created solely as an “offset” for other federal tax relief. No one, including most of the Congress, knew it was in the bill until after it passed.

The provision does not take into account the fact that the payments from which the withholding is to be taken are gross payments to architects are NOT profits. They are used to pay contractors, subcontractors, purchase material, etc. This Congress we will be working with a coalition of similarly situated government contractors to achieve rescission of the provision. Reps. Meek (D- FL) and Herger (R- CA) have introduced legislation (H.R. 1797) to do this. The AIA supports this bill.

In addition, the AIA is an original member of the Government Withholding Relief Coalition (GWRC), which includes more than 50 associations that are fighting to repeal the 3 percent withholding provision. The Coalition’s website is:

https://outlook.aia.org/exchweb/bin/redir.asp?URL=http://www.withholdingrelief.org/portal/gwrc/default.

In late April, we undertook an AIA Action Alert regarding this issue. Electronic notification of the pending legislation was sent to all AIA members. As a result, more than 2500 AIA members responded and made in excess of 8000 contacts with Members of Congress. AIA members who missed the Action Alert and now desire to respond can do so by visiting https://outlook.aia.org/exchweb/bin/redir.asp?URL=http://www.aia.org/gov and then clicking on Contact Your Members of Congress.

AIA 150

AIA Federal Affairs arranged for concurrent resolutions recognizing the AIA’s 150th birthday to be introduced in both the House (H. Con. Res. 53) & the Senate (S. Con. Res. 9). Congressmen Earl Blumenauer (D-OR) and Phil English (R-PA) sponsored the first. Senators Mary Landrieu (D-LA) and Norm Coleman (R-MN) sponsored the second.

In addition, we completed the paperwork for transmission to the White House to obtain a Presidential Proclamation recognizing Architecture Week as 2nd week of April. The Proclamation arrived on April 12th – just in time.

We also arranged for Rep. Blumenauer to serve as keynote speaker at the 150th celebration dinner of the Board at Delmonico’s in NYC on April 13th.

Climate Change

For the second Congress, the AIA has taken a leading position on the need for a “cap & trade” system for regulating greenhouse gases. Clearly this issue is much more popular in this Congress than the last, but legislation has still been slow to develop. This is because there is potential for such legislation to have a significant negative impact on economy if it is not well thought out. In addition, the Administration opposes this approach. The AIA is working with several groups interested in the issue – one composed mostly of members of the environmental community and one composed mostly of industry representatives.

Cash Accounting

The federal tax code allows only professional services corporations, like architectural firms, that are 95% owned by those in the profession they represent (i.e. architects) or have gross receipts below $5 million to use cash accounting for tax purposes. All others must use accrual accounting. Cash accounting is far more advantageous. AIA supported bills in last Congress to relax the 95% ownership test. These bills were sponsored by Republicans and found most of their support among Republicans. We worked in coalition on this issue with the American Council of Engineering Companies (ACEC).

This year we are again working with ACEC and will seek Democratic sponsorship for reintroducing cash accounting legislation this Congress. They have extra funds from last year and are hiring a consultant to help place the bill with an appropriate sponsor. They will lead – we will follow.

Good Samaritan

Last fall’s AIA Call for Issues demonstrateded a substantial interest among AIA members in a federal good samaritan law. This type of legislation would provide relief from negligence liability for architects who volunteer without pay to assist in times of national or regional emergency. Twenty four states have such laws

Last Congress, Rep. David Reichert (R-WA) introduced legislation to provide such relief for contractors. He is willing to modify that legislation to include architects and engineers in this Congress. Our allies include Asso. Gen’l Contractors, and ACEC. However, the new leadership in this Congress makes success on this issue much more difficult politically. The trial lawyers oppose this type of liability reform and have strong a relationship with the Democratic Party. To date, we haven’t been able to get Democrats on House Judiciary Committee interested in cosponsoring Rep. Reichert’s bill.


Green Schools

The AIA is beginning to put together a coalition with Sustainable Business Industries, the American Federation of Teachers and others to advocate the funding of a major section of the No Child Left Behind statute that includes a study of educational benefits of well-designed & sustainable school buildings. The reauthorization of No Child Left Behind is supposed to occur in this Congress.

Healthcare Legislation

Last Congress we aggressively supported legislation to allow the AIA and other trade & professional groups to offer nationwide health insurance to their members and their members’ employees. This legislation would preempt state laws that currently make the creation of such large national risk pools impossible.

That legislation passed the House last summer, but the proponents failed to break cloture in the Senate by 4 votes. In the Senate vote, the AIA provided the only Democrat to support the bill. This year, the chances for such legislation are less good. Both proponents and opponents of last year’s bill have refrained from reintroducing competing bills so far in this Congress. It is hoped that some form of compromise can be struck.

Intelligence from an event for Rep. Pomeroy (D-ND) indicates that the Democrats intend to have a bipartisan healthcare bill of some sort in this Congress – out of the Ways & Means Committee. We will follow.

Sun Wall

In 2000, the AIA and the Dept. of Energy held a joint design competition for a solar wall to be added to the DOE’s headquarters in DC. This addition would use both passive solar and solar PV to provide hot water, space heating and electricity. The competition won by Solomon Cordwell & Buenz of Chicago.

The project was never funded. In 2005, the AIA worked with Rep. Jim Oberstar (D-MN) to get money authorized for the Sun Wall in the 2005 Energy Policy Act. Unfortunately, no monies were ever appropriated for the project.

After this fall’s election Mr. Oberstar became new Chairman of House Transportation & Infrastructure Committee. This is a big change.
Within six weeks of taking up his chairmanship, the House passed a new $40 million authorization for the Sun Wall to be taken from the GSA’s federal building fund (no appropriation necessary). We have congratulated Rep. Oberstar for his moving the Sun Wall authorization through the House and offered to help him with it in the Senate.

Department of Transportation Study

In 2005 the AIA got an “earmark” in the multi-year transportation bill for a $2 million study of “best practices” for using federal highway funds to enhance communities adjacent to big highway projects. This study was to be done by a “national association representing architects”. We are partnering with the University of Minnesota Center for Transportation Studies to complete the study. The law requires that the study to be done this summer. In late March, AIA Federal Affairs held three focus groups to let AIA member architects discuss the issue.