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Federal Regulatory Monitor

Welcome to the AIA’s Federal Regulatory Monitor. Here you will find up-to-date information on proposed federal rules and regulations that affect the practice of architecture, and tools to help you comment on key issues before federal agencies.

For updates about the Monitor, make sure you read The Angle, the AIA’s informative government-affairs newsletter. Click here to subscribe to The Angle.

If you have questions or comments, please email Andrew Goldberg, Assoc. AIA, manager of Federal Regulatory Activities, at agoldberg@aia.org.

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Key Issues

Accessibility

Housing

Procurement of A/E Services

Security

Sustainability

  • Greening the Federal Government: Information Available Online
  • White House Expands Energy Efficiency in Federal Buildings

Taxation

 

Accessibility

GSA Adopts New Accessibility Standards

The U.S. General Services Administration (GSA) has adopted new accessibility standards for federally funded facilities under the Architectural Barriers Act (ABA).

The standards are based upon guidelines published by the Access Board in 2004. The adopted standards will apply to a wide range of new or altered buildings that are covered by the ABA, the 1968 law that ensures access to facilities designed, built, altered, or leased with federal money.

According to the GSA, the new standards contain provisions that “improve accessibility while facilitating compliance.” The standards cover the design and construction of new facilities, altered areas of existing facilities, and leased facilities. They will apply to construction and alterations that commence after May 8, 2006, and to leases entered into after this date.

The new standards will replace the existing standards, known as the Uniform Federal Accessibility Standards (UFAS). Compliance with the UFAS standards will be permitted for construction and alterations that begin before May 8, 2006, and for projects whose design is substantially complete by that date. Further details are provided in a notice issued by GSA (see section 102-76.60, which is located on page 62 of the PDF version).

The GSA’s new ABA standards apply to all federally funded facilities, except residential, postal, and military facilities, which are covered by standards maintained by other federal agencies. Last May, the U.S. Postal Service updated its standards that govern post offices and other postal facilities. The Departments of Housing and Urban Development (HUD) and Defense will soon complete the implementation of new standards under the ABA.

Postal Service to Implement New Accessibility Guidelines

The U.S. Postal Service has announced that it is adopting the new Architectural Barriers Act Accessibility Guidelines (ABAAG) for its facilities.

The new ABAAG were published by the Access Board in July 2004 along with new Americans with Disabilities Act Accessibility Guidelines (ADAAG). The Department of Justice is currently undergoing an extensive review process to determine how to enforce the ADAAG.

The Postal Service will apply the new ABAAG to its owned facilities that have not reached 30 percent design completion by October 1, 2005, or for which design-build solicitations have not been issued prior to October 1. For leased facilities, the new ABAAG will apply for new construction, additions and alterations with designs that have not reached 30 percent completion by October 1; and to all leased facilities with leases signed on or after October 1.

For more information: To read the Postal Service’s announcement, click here.

To read the new ADAAG/ABAAG, click here.

AIA Calls for Clear Rules on ADAAG

The AIA has urged the U.S. Department of Justice to ensure that the newly proposed Americans with Disabilities Act Accessibility Guidelines (ADAAG) are adopted and enforced in a way that is “consistent, clear and certain.”

The comments come in response to the Department’s Advance Notice of Proposed Rulemaking for the new ADAAG, which were published by the U.S. Access Board in July 2004. This represents the first major revision to the ADAAG since they were implemented following the 1990 enactment of the landmark Americans with Disabilities Act.

In September 2004, the Justice Department asked the public to comment on a range of issues related to the implementation and enforcement of the new ADAAG based upon the Access Board’s July adoption. The AIA will soon submit its comments to the Department of Justice. The DOJ has not issued a specific timeline for formal adoption and enforcement of the new ADAAG.

Noting the difficulties that architects and others face when rules and standards for accessibility are not clearly delineated, the AIA’s comments state that “the approach taken by the Department of Justice to the development of the ADAAG is critical to the effective application of fair and equitable access to the built environment.”

“These comments reflect the experience and the expertise of the AIA membership,” said AIA codes consultant David Collins, FAIA, who led the drafting process. “Because they have been working “hands-on” with the ADAAG for the past decade, architects have a great deal to contribute to the content and process of adopting the new and improved guidelines. We want to ensure that the Justice Department had the benefit of their input.”

The Justice Department is accepting comments from the public on its Advance Notice until May 31, 2005. After that, it will develop a Notice of Proposed Rulemaking, in which it will propose how the new ADAAG will be implemented and enforced. There will be another comment period following that Notice. After that period closes, the Justice Department will issue its Final Rule and the timetable for its enforcement.

For more information: Read the Justice Department’s advance notice of proposed rulemaking.
Read the AIA’s comments
Read the Angle article

The Justice Department is accepting comments on its advance notice until May 31, 2005. To comment, click here.

Access Board Releases Report on Courthouse Accessibility

An advisory committee established by the U.S. Access Board that included representatives from the AIA has released a report offering recommendations on making courthouses more accessible to people with disabilities.

The Courthouse Access Advisory Committee presented its report to the full board in November. It provides design guidance and best practice recommendations for achieving access in courthouses and offers outreach and educational strategies for disseminating this information.

Over the course of its two-year charter, the committee examined design issues in depth, toured different types of courthouses across the country, and crafted solutions that ensure access without compromising traditional features essential to courthouse design. The committee’s recommendations will supplement accessibility guidelines the board maintains under the Americans with Disabilities Act and the Architectural Barriers Act.

James L. Beight, AIA, Phillips Swager Associates, and Andrew Goldberg, Assoc. AIA, AIA manager of federal regulatory affairs, represented the AIA on the committee. Other members of the committee included disability groups, members of the judiciary, court administrators, representatives of the codes community and standard-setting entities, government agencies, and others with an interest in accessibility issues.

Said Access Board Chair and General Services Administration Deputy Administrator David L. Bibb, “I am confident, thanks to the work of this committee, that future courthouses will fulfill the promise that justice for all means access for all.”

More information is available on the Access Board committee Web page.

DOT Applies New ADA Guidelines to Transportation Facilities

The U.S. Department of Transportation has adopted the 2004 Americans with Disabilities Act Accessibility Guidelines (ADAAG) for transportation facilities covered by the ADA.

The standards will apply to bus stops and stations, rail stations, and airports built or altered after November 29, 2006. The standards may also apply to certain key rail stations and intercity rail stations but otherwise do not apply to existing facilities except in the case of alterations. The new standards include updated provisions that improve accessibility while facilitating compliance. For example, the standards clarify and enhance access to fare vending machines and bus stops, and include revised specifications for tactile warnings along boarding platform drop-offs that will accommodate a wider range of available products.

The U.S. Access Board published the new ADAAG in July 2004. The Justice Department has not issued a specific timeline for formal adoption and enforcement of the ADAAG for places of public accommodation, commercial facilities, and state and local government facilities.

The DOT notice is available on the agency's Web site.


Housing and Community Development

HUD Releases Report on Regulatory Barriers to Affordable Housing

The U.S. Department of Housing and Urban Development has released a report, "Why Not in Our Community?" that explores the impact of regulatory barriers on affordable housing.

The report finds that outdated, exclusionary and unnecessary regulations continue to block the construction or rehabilitation of affordable housing in some parts of America. "Why Not in Our Community?" also finds that many communities are actively removing these barriers and promoting the production of housing that was formerly beyond the reach of many working families.

HUD Secretary Alphonso Jackson said: "This report is a call to action for government at every level to rethink its approach to affordable housing and begin asking, 'why not?' All of us need to raise the level of common sense to make sure we don't create man-made obstacles that close doors on the very people who should be our neighbors."

For more information: To read the report, click here.

HUD Affirms Design Fees Can Be Included in Mortgages

The U.S. Department of Housing and Urban Development has said that architects’ fees may be included in Federal Housing Administration (FHA)-insured mortgages.

The AIA, primarily through its Small Project Practitioners Knowledge Community, has been working to make architectural design services more broadly available to the middle class. In a letter to HUD, the AIA Government Advocacy team wrote, “A major barrier to providing such services on new single family homes is that the cost of design often matches or exceeds the equity requirement for the loan . . . The AIA believes that design fees, including services by architects and their supporting engineers and consultants, should be amortized in the mortgage.”

In response, Margaret E. Burns, director of the Office of Single Family Program Development, wrote to the AIA that “While [HUD’s] guidance does not explicitly allow for the inclusion of design fees for new construction (including services by architects and their supporting engineers and consultants), it is not adverse to such a fee being included in the cost of acquisition, similar to how the contractor’s price to build is now included.”

The AIA plans to work with HUD and the banking community to ensure that prospective homeowners and lenders understand that design fees can be included in mortgages.

Federal Agencies Help Communities Redevelop Closed Military Bases

As the U.S. Department of Defense embarks on its fifth round of base closures and realignments since 1988, the affected communities brace for change. In 2005, the Pentagon proposed, and the president accepted, recommendations from the Base Realignment and Closure commission (BRAC) to close 33 major military bases and realign 29, expanding some and shrinking others.

The loss of a military base presents major challenges to communities that depended on them as their economic engines. But it also presents opportunities for sustainable development, turning former barracks and airstrips into mixed-use communities, green space, multi-modal transportation hubs, and more.

Through its Office of Economic Adjustment, the Defense Department provides resources for communities facing the loss of a base. As a part of the process, the Department works with communities to form a Local Redevelopment Authority (LRA) that is charged with developing a Local Redevelopment Plan (LRP) that provides for reuse or redevelopment of the base site. Many communities across the nation have used the LRP process to turn empty military installations into models of community development.

Many federal agencies also take part in the process of helping communities redevelop abandoned military bases, from the Department of Housing and Urban Development to the Environmental Protection Agency.

The OEA has a list of approved LRAs across the country. For more information on how to get involved with an LRA, contact the OEA at wso.oeawebfeedback@wso.whs.mil.


Procurement of A/E Services

AIA Stresses Role of Architect in Military Design-Build

The AIA has called on the Army Corps of Engineers to maintain the critical and central role of architects in the design-build process, and to uphold qualifications-based selection (QBS) as it embarks on a massive new design and construction program for the U.S. military.

The AIA’s comments come in response to the Corps’ proposed new procurement vehicle to help it design and construct billions of dollars worth of new bases across the country as a result of base closures, realignments, and the creation of new modular fighting units. In late September, the Corps published a draft request for proposal (RFP) for design-build services for the first generation of these new bases and asked the private sector for comments on it.

Commending the Corps for its longtime commitment to QBS and for working in consultation with the private sector, the AIA stated its belief that “the public procurement process for building facilities should be fair, open, and focused on overall value.” The AIA’s comments go on to state that the Institute “believes that an architect is most qualified to play a lead role in the design-build team and that architects should be retained in that role regardless of which delivery method is used in order to maintain design integrity, functional and technical responsiveness, and to conduct on-site construction observation. The result is a better managed and executed project, keeping costs and schedules on track and ensuring that the final product matches the owner’s vision.”

In its comments, the AIA expressed support for a Corps proposal to provide stipends for design teams that reach the second and final phase of the selection process, but are not ultimately selected. “Many architectural firms are small or single practitioner ventures, and the costs associated with preparing the detailed documentation required under Phase II can be extensive,” the AIA wrote. “Many firms will be deterred from applying for Phase I without assurances that they will be fairly compensated for work that they may do in Phase II that does not result in their being offered the work.”

The AIA expressed its concern that some provisions of the Corps’ RFP, while well-intentioned, may have the effect of limiting competition by creating “impediments to ensuring that a wide variety of firms have the ability to compete and be short-listed.” In addition, the AIA offered to work with the Corps to ensure that the RFP’s Statement of Work and design deliverables use consistent and uniform definitions.

For more information: To read the AIA’s comments, click here: http://www.aia.org/SiteObjects/files/corpsdesignbuildcomments.pdf

AIA Opposes New GSA Schedule, Calls for QBS

The AIA has expressed its strong opposition to a proposed new GSA schedule for “ancillary” repair and alteration (R&A) services, forcefully arguing that the federal government needs to do a better job enforcing the Brooks Act before adding new schedules.

In August, the GSA released a proposal to allow federal agencies to contract for R&A services based upon cost and asked the public to comment on it. (Click here to read the Federal Register notice). The GSA maintains that agencies currently have to contract with multiple vendors when making acquisitions that require ancillary repair and alteration, such as moving walls to accommodate new furniture or installing wiring for new computer systems. The GSA suggests several potential methods to allow agencies to procure these services through its price-based schedules, and proposes a number of pricing mechanisms, all of which would enable agencies to seek the lowest cost contractor to perform the work.

In its public comments responding to the proposal, the AIA notes that, “The GSA’s proposed addition of R&A services to its schedules program, without a detailed plan for ensuring compliance with existing statutory requirements, is deeply troubling. . . . it is likely that agencies will utilize the new schedule to procure more significant construction and design services through the price-based schedules program rather than rely on [QBS].”

Under the Brooks Act, the federal government must use qualifications-based selection, and not low bid, when contracting for architectural and engineering services. But some federal agencies continue to purchase design services through price-based procurement schedules.

The AIA’s comments state that “although the GSA tacitly recognizes its obligation to comply with [the Brooks Act] by providing disclaimers on its schedules to inform agencies that A/E services must be procured pursuant to the QBS procedures . . . there is no evidence to suggest that agencies are following this information, and there exists no method at this point in time for the GSA to enforce it. . . . [A new R&A schedule] would simply add to the problem by creating yet another schedule that would invite such abuse.”

The AIA’s comments also note that the GSA proposal suggests that federal agencies seeking to use an R&A schedule be instructed that “All work shall be in strict accordance with ``Building Standards.' . . . Work shall have no impact on historical preservation elements or historic zones. . . . [and] Work shall meet all applicable building codes, including but not limited to egress and fire safety standards.”

According to the AIA’s comments, “The fact that the [proposal] suggests that such work may have an impact on health and safety, building codes, and historic properties means that the GSA acknowledges that the schedule could very well be used for projects that require the involvement of a qualified design professional. And yet the White Paper provides no mechanism for enforcing such instructions. Architects are the only professionals who are trained to understand how all elements of the built environment protect the public’s health and safety. They have unique understanding of building codes and historic preservation. Any federal design or construction work, including repair and alteration, that impacts building codes, historic properties, or the health and safety of building occupants must be performed according to the policies and procedures set forth in [the Brooks Act].”

In its comments, the AIA urged the GSA to focus on enforcing the Brooks Act and preventing abuses in existing price-based schedules before adding new schedules that would “invite violations of” QBS.

For more information: To read the AIA’s comments, click here http://www.aia.org/SiteObjects/files/gsarulecomments.pdf

To read the GSA’s notice, click here: http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-16254.htm

AIA Calls on GSA to Uphold Brooks Act

The AIA has urged the U.S. General Services Administration to take immediate action to stop abuses of the Brooks Act by federal agencies.

In March, the GSA published an interim rule intended to ensure that federal agencies procure A/E services via the Brooks Act’s qualifications-based selection procedures. The interim rule comes as a result of a 2003 law that prohibits agencies from awarding A/E contracts under multiple-award schedules, which typically are given based upon low bid.

The Brooks Act requires the federal government to procure A/E services using qualifications-based selection. However, in recent years, the AIA and others have raised concerns that agencies routinely violate the Brooks Act.

In comments submitted on May 9, the AIA stated that it “believes that the interim rule, while well-intentioned, will do little to prevent abuses of the Brooks Act that currently take place. Furthermore, without any clear and feasible enforcement mechanism, there is no reason to believe that the interim rule will cause federal agencies to change existing behaviors.”

The AIA called on the GSA to take four steps to protect the Brooks Act:

  • Increasing its enforcement efforts to ensure that existing multiple-award schedules are not exploited by agencies to bypass QBS procedures
  • Removing A/E services that are currently offered under multiple award schedules
  • Ending abuses of multi-year contracts and design-build contracts that allow agencies to circumvent the Brooks Act
  • Developing a program to provide advice and training for all contracting officers across the federal government about QBS

"By giving the GSA a number of options to improve enforcement of the Brooks Act, we hope to engage them in a constructive dialogue about how to stop these abuses,” said manager of AIA Federal Regulatory Affairs Andrew Goldberg, Assoc. AIA. “We continue to invite our members to let us know when they encounter Brooks Act violations so that we can raise them with the appropriate authorities.”

For more information: To read the AIA’s comments, click here.

Army Corps Reaffirms Use of QBS; Directs Regions to Follow Brooks Act

The Army Corps of Engineers has reaffirmed its support of qualifications-based selection (QBS) and has reminded its regional offices to follow Brooks Act QBS procedures for the selection of architects and engineers.

In a November 1 Engineering and Construction Bulletin, then-Chief of Engineering and Construction Donald Basham, P.E., writes that the Corps is “reinforce[ing] existing policies for following Brooks A-E Act for procuring A-E services. Several recent solicitations have been questioned by A-E industry and [headquarters] has been asked to explain why Brooks A-E Act procedures were not used. All [Corps] offices are directed to comply with the policies, thus minimizing such inquiries and concerns of A-E industry groups. If the type of work falls within the definition of A-E services, Brooks A-E Act shall be followed even if the work is not required to be approved by a registered architect or engineer.”

The Bulletin then lays out the procedures that contracting officers must follow when procuring architects and engineers under QBS.

Federal Contracting Information Available Online

A Washington, D.C.-based non-profit organization has launched a new online tool that tracks all federal government contracts, including those for design and construction.

The Web site, www.FedSpending.org, was developed by the group OMB Watch. According to the group, the site allows “users to search, aggregate and analyze all federal spending. For the first time, itemized information on the more than $12 trillion that the federal government has disbursed between 2000 and 2005 will be available to the public in a useful format. Users can search contract and grant information by agency, congressional district, and recipient, for example.”

View information about architecture and engineering contracts here. Or, from the home page, click on the “Contracts” tab on the left side. Then select “By product or service provided.” You can alphabetize the list that appears by selecting the “Product or service category” heading. “Architect and Engineering Services” is the eighth category from the top. 
 


Security

World Trade Center Investigation: AIA Responds, Calls for Improvements

The AIA has urged the federal government to provide funding for new fire testing facilities and to ensure that state and local governments retain the power to set building codes in their response to the government’s investigation into the collapse of the World Trade Center on September 11, 2001.

Commending the investigation by the National Institute of Standards and Technology (NIST) as the “definitive historical record of the largest and most devastating building disaster ever,” the AIA points out that the study demonstrated the buildings’ robustness after the attack, standing long enough to allow thousands of occupants to evacuate. Click here to read the NIST report.

“The [NIST] report finds that the buildings would have survived the catastrophic event were it not for the fact that the aircraft caused extensive damage to the buildings and their fire protective systems, and ignited extensive fires that were limited only by the amount of combustible material they could reach,” the AIA response says. “Based upon the outstanding success of these buildings under extraordinary circumstances, it is clear that the design community can be trusted to create redundancies for typical building emergency situations, that codes are developed in a manner that provides sufficient input from all quarters to ensure adequate life safety for typical emergency situations, and that no upgrading of code requirements is warranted given the performance of these buildings.” Click here to read the AIA response.

The AIA’s response says that a number of the recommendations made by the NIST study “are not supported by the findings of the investigation. Other recommendations suggest reforms that have already been addressed by the design and construction industry or the model code organizations.”

For example, the NIST report recommends enhanced fire resistance ratings. But, as the AIA response points out, “Enhanced fire resistance was not an issue in the collapse, as the buildings would have survived even the massive fires caused by the aircraft had the planes not dislodged fire proofing materials. . . In fact, the lead investigator for NIST has stated that it is far easier to ensure that airplanes are not used as weapons against buildings than to design for such an event. [In addition] the instances of structural failure due to fire are extremely rare and, in a building equipped with sprinklers, even rarer. These facts do not indicate a need for enhanced levels of fire resistance in building design.”

The AIA response goes on to say that the NIST report misses opportunities to make recommendations that “would improve the understanding of how buildings perform in extreme events.” Noting that NIST could not find a testing facility in the U.S. that could handle assemblies of the size and length found in the twin towers, the AIA calls on NIST to ask Congress for funding for larger testing facilities.

In addition, the AIA urges NIST to facilitate the use of performance-based codes by expanding study of innovative materials and processes, and to foster development of “smart” building technologies that advise first responses of building conditions in an emergency.

For more information: To read the NIST report, click here: http://wtc.nist.gov/pubs/reports_june05.htm
To read the AIA’s comments, click here: http://www.aia.org/SiteObjects/files/aiawtcresponse.pdf

AIA Offers Comments to DHS on Infrastructure Response Plan

The AIA has called on the U.S. Department of Homeland Security (DHS) to devote more resources to protecting the built environment and to ensure that disaster planning includes natural hazards like hurricanes.

The comments came in response to DHS’ draft National Infrastructure Protection Plan (NIPP), which sets out the roles and responsibilities of government at all levels and the private sector in the protection, mitigation, and recovery of the nation’s critical infrastructure. The plan identifies 16 key infrastructure sectors whose protection the plan prioritizes. Although several of these sectors – including government facilities, transportation, and banking - have built elements, there is no explicit category for structures—a situation the AIA urged DHS to change.

According to the AIA’s comments, “There are an estimated 4.7 million commercial structures in the United States. Of these, 11 percent are government owned, and 75 percent are smaller than 10,000 square feet, while only five percent are larger than 50,000 square feet However, half of all employees occupy the five percent of buildings larger than 50,000. Programs and initiatives that involve building security . . . will not be effective unless DHS makes a clear commitment to addressing the cross-cutting needs of buildings and structures.”

The AIA also urged DHS not to place too much emphasis on man-made threats at the expense of natural hazards. “Every year natural hazards cause an estimated $52 billion in damages in the United States in terms of lives lost, disruption of commerce, property damage, and emergency response,” the AIA comments state. “Presently the potential for loss from a single large earthquake in a major U.S. urban area is estimated to be nearly $200 billion. The response to Hurricane Katrina in 2005, and the damage caused by Katrina and Rita to critical infrastructures and the built environment, demonstrate the need for a strong emphasis on natural hazards in the NIPP. In addition, providing resources to natural disaster resilience will benefit resilience to man-made disasters.”

The AIA’s comments also urge DHS to address the barriers that architects and allied professionals face when responding to disasters, including Good Samaritan laws.

For more information: Read the National Infrastructure Protection Plan: http://www.tisp.org/news/newsdetails.cfm?&newsID=704


Sustainability

Greening the Federal Government: Information Available Online

As the federal government works to improve the energy efficiency of its facilities, many agencies and task forces are providing updated information about sustainability programs and initiatives. Much of the information is available to the public, providing guidance that can be used by state and local governments and the private sector.

Some key resources include:

The Whole Building Design Guide, sponsored by the National Institute of Building Sciences (NIBS), is the “only Web-based portal providing government and industry practitioners with one-stop access to up-to-date information on a wide range of building-related guidance, criteria and technology from a ‘whole buildings’ perspective.” Visit their page on sustainability for information on relevant codes, regulations and laws, links to agency Web sites, best practices, and more.

EPA’s Energy Star program includes a target finder for new buildings and criteria for receiving the Energy Star rating.

The Federal Energy Management Program, at the Department of Energy, helps agencies meet sustainability goals by “advancing energy efficiency and water conservation, promoting the use of distributed and renewable energy, and improving utility management decisions at federal sites.”

The Interagency Sustainability Working Group (ISWG) comprises nearly 200 representatives from across the federal government. Its Web site includes updates on agency green activities and a model sustainability implementation plan for federal agencies.

The Sustainable Design Program at GSA provides information about what the government’s largest landlord is doing to green the federal government.

White House Expands Energy Efficiency in Federal Buildings

President George W. Bush has issued an Executive Order that calls on the federal government to reduce the use of greenhouse gas-producing energy in public buildings and bolsters sustainable design, construction, and acquisition practices. Issued on January 24, the Executive Order (http://www.whitehouse.gov/news/releases/2007/01/20070124-2.html) requires agencies to reduce energy use by almost a third over a 2003 baseline by 2015, reduce water consumption by 16 percent by 2015, and implement “sustainable practices” that include:

• energy efficiency, greenhouse gas emissions avoidance or reduction, and petroleum products use reduction
• renewable energy, including bioenergy
• water conservation
• pollution and waste prevention and recycling
• reduction or elimination of acquisition and use of toxic or hazardous chemicals
• high-performance construction, lease, operation, and maintenance of buildings.

The announcement comes on the heels of the president’s call in his State of the Union address for the country to reduce gasoline usage by 20 percent over the next decade. Meanwhile, both the House and the Senate are gearing up to take action on reducing energy usage and addressing climate change. The AIA is advocating legislation that would require agencies to reduce fossil fuel energy usage in federal facilities by 50 percent immediately, and 100 percent by 2030. (Read the issue brief. (http://www.aia.org/SiteObjects/files/FederalBuildings_2007.pdf)

Andrew Goldberg, Assoc. AIA, manager of AIA federal regulatory affairs, noted that while the reductions in energy usage outlined by the president are not as far-reaching as those supported by the AIA and others, it is a step in the right direction. “This shows that more and more policymakers recognize the impact of the built environment on climate change and energy consumption, and agree that the federal government should be taking a lead role by making its own facilities greener,” Goldberg said. “But it’s up to the design community to lead the way in showing that much more can and should be done.”


Taxation

AIA Raises Concerns About IRS Definition of A/E Services

The AIA has submitted comments to the Internal Revenue Service expressing concern over a proposal to narrow the definition of architectural and engineering services that would be eligible for tax relief under legislation enacted last year.

The "JOBS" tax bill, signed into law by President Bush in October 2004, includes a $358 million tax cut for architecture and engineering firms, a provision that the AIA advocated for throughout 2004. The central purpose of the tax legislation is to repeal certain tax breaks for exporters that had been found to be in violation of international law by the World Trade Organization. In place of these old FSC/ETI export-related tax incentives, the legislation creates a new tax cut for a variety of manufacturing businesses, which includes architecture and engineering firms.

In its interim rule on the new tax law, the IRS has proposed requiring that engineering and architectural services eligible for the tax cut relate to real property only, and declares that tangible personal property that is sold as part of a construction project is not considered real property. This restricted definition was not a part of the legislation passed by Congress and signed by the President, and was not included in the old FSC/ETI tax incentives.

AIA Position: On March 10, the AIA submitted comments to the IRS expressing concern that “the restriction to real property is not warranted by the history of the statutory provision, its legislative history or its purposes” and asking that the IRS drop the “real property” language from the final rule.

For more information: To read the interim rule, click here. To read the AIA’s comments, click here.

AIA Urges IRS Action on Tax Deduction for Energy Efficient Public Buildings

AIA Executive Vice President/CEO Christine McEntee has written to the IRS, urging the agency to take immediate steps to allow architects to take advantage of tax incentives for designing energy efficient systems for government buildings.

The Energy Policy Act of 2005 allows tax deductions of up to $1.80 per square foot for energy savings in commercial and public buildings placed into service in 2006 and 2007. (Read the June 15, 2006, Angle article.) In the case of public buildings, the deductions are to be allocated to the “person primarily responsible for designing the property.” However, without guidance from the IRS, the deduction cannot become effective. Although the IRS issued guidance on the tax incentives for commercial buildings, they have yet to do so for public buildings.

In her July 3, 2006, letter, McEntee wrote that the AIA “strongly supports [the tax incentives] because we believe it will help spur the design and construction of energy efficient buildings in both the public and private sector.” But, “because of the short life of this provision (which expires at the end of 2007) we fear that further delay will undermine any incentive . . . for the public sector to develop energy efficient measures for their buildings.”

Earlier this year, the AIA submitted comments to the IRS as a member of the Commercial Building Tax Deduction Coalition (CBTD) proposing that the guidance should define the designer “as the person who provides qualified energy services to the governmental body. In the case of new building construction or major renovation, such person generally would include an architect or engineer of record or design-build firm that provides qualified energy services. In the case of a retrofit of an existing building, such person generally may also include be an energy services company, utility company or licensed professional providing qualified energy services.”

The AIA also is working with Congress to pass legislation to extend the program beyond its December 31, 2007, expiration date.

IRS Issues Advance Guidance on Commercial Building Tax Deduction

On June 2, 2006, the Internal Revenue Service (IRS) released a proposed guidance document on how commercial building owners or leaseholders can qualify for the tax deduction for making their buildings energy efficient. The proposed guidance establishes a process to certify the required energy savings to claim the deduction.

The commercial building deduction, which was enacted in the Energy Policy Act of 2005, allows taxpayers to deduct the cost of energy-efficient property installed in commercial buildings.

The amount deductible may be as much as $1.80 per square foot of building floor area for buildings that achieve a 50-percent energy savings target. The notice provides that buildings below the 50-percent threshold may nevertheless qualify for a deduction of up to 60 cents per square foot of building floor area if they meet a 16¨ø-percent energy savings target.

"We are glad that the IRS issued this advance guidance, and we await the second set of guidance, which will address government buildings," says AIA President-elect RK Stewart, FAIA. "We will continue to work with our coalition partners to ensure that this important piece of legislation is implemented."

The IRS will release a second set of guidance, which will address government buildings. The Energy Policy Act of 2005 allows the designer of the energy saving pieces of the qualifying building (building envelope, HVAC, and lighting) to receive the tax credit for government buildings (where the owner has no tax liability and therefore cannot take advantage of the credit). The AIA is working with the Commercial Building Tax Deduction Coalition and the IRS to make clear that in most cases, the architect should receive the tax credit.

The AIA and its partners in the coalition are also working with Congress to enact legislation to extend the program beyond its December 31, 2007, expiration date.

Online Resource for Understanding the New Tax Deductions

A coalition of public and private sector agencies and organizations has launched a Web site that provides updated information to architects, builders, owners, consumers, and others about how to use the building tax deductions passed by Congress in 2005.

The Tax Incentives Assistance Project's (TIAP) page includes information, FAQs, and useful links about the commercial building tax deduction and residential and appliance tax provisions, as well as data about vehicle tax provisions that were also included in the law. The site is available at http://www.energytaxincentives.org.



Additional Resources