Issues & AdvocacyIssues & Advocacy

Opposition to S Corp Tax Grows, Access-to-Credit Amendment Moves Forward, Mayors Group Endorses Green Code, Codes Advocacy Initiatives Highlight Outreach Efforts, and more

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Opposition in Congress to a proposed increase in payroll taxes on architecture and other professional services S corporations is growing following sustained lobbying by the AIA and other groups, with a key Republican senator proposing to kill it and the top Democrat on the tax-writing Finance Committee looking to revamp it.

The provision would subject earnings by professional services S corporations whose “principal asset is the reputation and skill of three or fewer employees” to payroll taxes. Although supporters of the provision argue that it would close a loophole that allows some S corporations to avoid paying payroll taxes, the AIA and other professional associations have argued that it would punish small, service-oriented businesses around the nation that follow the rules. The offending provision is in Section 413 of H.R. 4213, massive “extender” legislation that would extend a series of programs that expired on May 31, including unemployment benefits. The bill passed the House before Memorial Day, but has languished in the Senate, lacking the 60 votes needed to move forward.

AIA members have sent nearly 12,000 messages to Capitol Hill voicing opposition to the provision, and AIA members have been quoted in the national media describing the impact on their firms. One member, Gabriel Durand-Hollis, AIA, told The Wall Street Journal June 11 that the tax increase would boost his federal tax bill by $30,000 or more.

“If we had to send a big check like that to the IRS at the end of the year, we’d have to take a hard look at whether we can afford Christmas bonuses, or that new software purchase,” Durand-Hollis told the paper.

After hearing from architects and others in Maine, Sen. Olympia Snowe (R-ME) proposed an amendment with Sens. Mike Enzi (R-WY) and John Ensign (R-NV) to eliminate the provision from the bill.

In a June 11 statement, Snowe said, “At a time when Congress continues to dither on enacting a small business jobs bill, Section 413 is a poison pill in this tax bill, robbing American small businesses of the capital they need to create new, good-paying jobs.” Snowe’s opposition to the provision is significant because Democrats will likely need her vote to pass the extenders bill.

Senate Finance Committee chair Max Baucus (D-MT) has acknowledged the concerns and has indicated that the committee will try to fix the provision to protect tax-compliant S corporations.

“We’re talking to senators; we’re talking to staff and Joint Tax [Committee] to make it fair,” Baucus told The Hill. “We’re trying to close a loophole to stop the abuse. We’re doing it the way that’s fair.”

The Senate is expected to continue debate on the extenders bill for the remainder of the week as leaders try to work out a compromise version.

For more information on the proposal and the AIA’s efforts to oppose it, click here. To contact your members of Congress to express opposition to the S corporation tax increase, click here.

For additional information, contact Andrew Goldberg, senior director, Federal Relations, or Cooper Martin, manager, Federal Research and Policy Development.

The House yesterday debated legislation to provide aid to small businesses and community banks who are struggling with the lingering effects of the real-estate crisis, approving an AIA-backed amendment to help community banks deal with commercial real estate debt.

AIA member Jim Determan, AIA testified in support of the Small Business Lending Fund Act of 2010 (HR 5297) before the House Financial Services Committee on May 18, stating that, “If you ask architects across the country today why conditions are so bad, you will inevitably hear the same two responses: one, firms are unable to secure credit to keep operations going; and two, clients are unable to secure the financing needed to get construction and renovation projects started.”

During debate on the bill, the House approved an amendment by Rep. Ed Perlmutter (D-CO) that would further enhance the bill and enhance credit markets by allowing small, community banks to amortize their commercial real-estate losses. Depending on each bank’s circumstances, the amortization process would allow these distressed banks to write down their losses over a six to ten year period. By distributing the impact on banks’ annual balance sheets, the change should free additional credit to be loaned to small businesses and allow new projects to move forward. The practice will not only help banks with new loans, but it will allow them flexibility to work out existing loans as well. A similar Loan Loss Amortization Program was established in the early 1980s to allow agricultural banks to handle large sums of failing loans from farm property that rapidly had declined in value.

The AIA marshaled the support of the building industry to urge the House to approve the amendment.

For additional information, contact Andrew Goldberg, senior director, Federal Relations.

The Gulf oil spill and the dwindling number of days until the mid-term elections are putting pressure on Congress and the White House to take action on energy policy.

In his June 15 Oval Office address about the spill, President Obama used the BP spill to increase momentum for legislation that would promote energy efficiency and renewable energy and reduce greenhouse gas emissions.

“The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now,” Obama said. “Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.”

Meanwhile, Senate Majority Leader Harry Reid (D-NV) convened Senate Democrats June 16 to try to reach consensus on an energy bill that he can bring to the Senate floor in July. Most observers believe that the bill would be based largely on the American Clean Energy Leadership Act (ACELA), which passed the Energy and Natural Resources Committee last June. That bill has numerous provisions related to energy efficiency in the built environment, including a provision promoting advance building codes and money for building retrofits.

It is expected that supporters of a cap-and-trade proposal to address greenhouse gas emissions, developed by Sens. John Kerry (D-MA) and Joe Lieberman (I-CT), will try to advance that as well, but opposition from nearly all Republicans and many Democrats may prevent it from advancing.

On June 16, the AIA sent a letter to the Senate urging it to take action on provisions that will both foster sustainable buildings and create jobs in the design and construction industry. The letter states, “With the Gulf oil spill tragedy uppermost in the national consciousness, the upcoming debate over energy policy presents Congress with a once-in-a-lifetime opportunity to make major strides towards reducing our nation’s carbon footprint, promoting greater energy independence, lowering Americans’ energy bills and putting thousands of people back to work building a green economy.”

For additional information, contact Andrew Goldberg, senior director, Federal Relations.

Newly-confirmed Architect of the Capitol Stephen Ayers, AIA, told the AIA Convention that the AIA is a vital partner in the effort to maintain and protect the nation’s seat of democracy.

Speaking at the June 11 general session, Ayers, who was confirmed as the 11^th Architect of the Capitol last month by the U.S. Senate, noted the long-time connections between the AIA and the United States Capitol. The first Architect of the Capitol, William Thornton, also designed the Octagon House; and Thomas Ustick Walter, who as Architect of the Capitol in the 1850s designed the Capitol dome, was one of the founders and second President of the AIA.

“I am pleased today as a long time member of the AIA to carry-on this connection between the community of architects in America and their Capitol,” Ayers said.

Ayers told the Convention that the ability of his 2,600-person staff to serve as stewards of the Capitol complex was dependent upon “collaboration and partnership with the AIA and talented people like you.

“I hope you will join with us as we the face head-on the challenges of the next decade: integrating new sustainable technologies while preserving historic spaces, ever-challenging maintenance needs for an ever-aging Capitol, and inspiring the next generations of architects and craftsmen in the value of public service,” he added.

In addition, Ayers also was the keynote speaker at the Citizen Architect reception June 9.

For additional information, contact Andrew Goldberg, senior director, Federal Relations.

The U.S. Department of Energy has issued a notice of proposed rulemaking governing sustainable performance standards for new and renovated federal buildings. The new rules were required in the 2007 Energy Independence and Security Act and will relate to standards for life cycle cost effectiveness of federal facilities as well as sustainable siting, design, construction, water conservation and energy efficiency. The new rules also will provide federal agencies criteria for use of green ratings and certification systems.

DOE is accepting comments on the rule until July 27. For more information, click here.

For additional information, contact Andrew Goldberg, senior director, Federal Relations.

The Component Spotlight highlights the important work of the more than 300 components across the country.

The AIA Pasadena and Foothill Chapter is leading the way on civic engagement by becoming the first AIA chapter to develop a local Citizen Architect Committee. The chapter kicked off its effort with a November 2009 meeting held concurrently with the Transportation Transformation Infrastructure and Transportation Town Hall.

The Citizen Architect Committee is now gaining steam, with thirty architects attending the most recent committee meeting. Mark Gangi, AIA, past president of the chapter, commented that “this was the largest committee turnout ever. It was unprecedented, with a lot of excitement. We reported out on the community meetings that we had made with the various cities in our chapter, reviewed the RUDAT and SDAT program, and discussed strategic alliances with other organizations. Gangi added, “I also showed slides at the meeting of a recent helicopter flight with the mayor of Pasadena, which was on a clear day and focused on rail, so one could imagine a smog-free San Gabriel Valley connected by transit and all that it could entail.”

At the meeting, committee members were very excited and discussed reasons why architects should be civically engaged and opportunities for the committee.

Furthermore, Gangi participated in the 2010 Citizen Architect Exchange at the AIA Convention as a panelist and discussion group leader. He discussed his chapter’s program and shared best practices with other Exchange attendees on how they could develop their own successful local Citizen Architect programs.

To highlight your component, contact The Angle (govaffs@aia.org) and describe your component’s recent successes and/or innovative initiatives.

The U.S. Conference of Mayors supported a number of resolutions this year focused on the creation of sustainable communities. First and foremost, the mayors endorsed the International Green Construction Code (see the Codes Advocacy piece below for more information). Mayors also endorsed the following resolutions:

• Support for Sustainable Development in Cities – Calls for cities to adopt the forthcoming STAR Community Index as a sustainable planning tool and calls upon Congress to pass the Livable Communities Act and the Enhancing Livability for All Americans Act, and to fully fund the Sustainable Communities Partnership;

• Support for the Greening of School Districts – Calls upon mayors to work with their local school districts to implement green initiatives in their school districts and pursue certification for school buildings through third-party ratings and certification systems (e.g., LEED);

• Support for Green Affordable Housing and Financing – Requests that Congress pass the GREEN Act, the Energy Efficiency in Housing Act, and similar language that will ensure that the benefits of green buildings are accessible to all Americans; and

• Support of Financing Mechanisms to Pay for Energy Retrofits of Existing Buildings – Asks state legislatures to adopt enabling legislation that allows for Energy Financing Districts (e.g., PACE) to be established in states and used to finance retrofit building projects.

For additional information, contact Brooks Rainwater, director, Local Relations, or Renée Wadsworth, manager, Local Relations.

The Local Relations team is now sending out monthly updates to the Local Government Network (LGN) discussing important upcoming projects, ongoing initiatives, and travel plans so that we can coordinate meetings with local AIA chapters and get input from all of you. Please feel free to contact Brooks Rainwater, Renée Wadsworth, or Shannon Clarke with any questions or comments related to these updates.

This month’s update features sections on Local Relations’ involvement in the 2010 AIA Convention; the promotion of the design profession, with a focus on jobs; ongoing civic engagement efforts; upcoming Local Leaders in Sustainability reports; and partnerships and opportunities with allied organizations. Click here to view the update.

AIA Vote of Confidence for the IGCC

A resolution asking for the AIA’s continuing support of, and active engagement in, the development of the International Green Construction Code (IGCC) as well as support for AIA components as seeking adoption of the code in their jurisdictions was adopted at the AIA Convention in Miami. Resolution 10-3, entitled “Support for Development of the International Green Construction Code,” states that the AIA “should continue to be an active leader in the development, adoption, administration and enforcement of model building codes.”

This resolution could not be more timely – not only in terms of the importance of advocating for a base model code for green construction, but for emphasizing the essential need for architects to engage in model code development. Typically, architects engage in building codes at the enforcement level as a basic requirement for practice, but. There is a whole code development world that affects what ultimately is adopted by states and localities and, subsequently, enforced by building officials – and that is where the AIA is working to advocate on behalf of our members. With its involvement in the development of the IGCC, the AIA has had the opportunity to write the code language that will directly affect our members’ practices. The ICC and ASHRAE each have processes in place that you may not realize are public, and in which you can participate. Model code development is typically on a three-year cycle and, in general, include regular public comment periods for anyone interested in the content of codes to submit recommended changes to them.

For individual AIA members to advocate for the IGCC, the best place to start is right at home. Find out your state’s plans for future code adoptions and be a part of the AIA’s continued participation in the development of the IGCC and engagement in the maintenance and improvement of all the codes that affect the practice of architecture.

Citizen Architect Exchange is Forum for IGCC Discussions

As part of a breakout session during the Citizen Architect Exchange at Convention, Chris Green, AIA, and Steve Winkel, AIA, PE – both of whom played integral roles in the initial development of the IGCC – shared ideas on how to advocate for the code. Among the common themes were the importance of communication with leaders that make decisions on the adoption of codes; understanding the capacity and expectations of your building department; and participating in the comment periods and the public hearings that take place during each code cycle.

Knowing what is in the code is essential not only to ensure that you’re creating code compliant designs, but also so that you are aware of and will advocate for changes that will positively affect your practice and your clients. Every building department is different and has a unique manner by which it will enforce a code. Talking with your clients and building owners, city council representatives, and local chambers of commerce about the IGCC and other code-related concerns will help spread the word that architects are “in the know,” concerned about the health, safety, and welfare of the public at large, and interested in shaping the laws that affect the built environment. Within your local chapter, asking for code-related continuing education courses will promote the creation of the right training to keep you and your firm apprised of the latest developments in the code in your state. If you have a connection to a local school of architecture, engage them about the importance of developing codes curricula.

The Energy Codes: The DOE wants YOU

Dave Conover, PE and Pam Cole of Pacific Northwest National Laboratory and Jessyca Henderson, AIA, the AIA’s director of sustainability advocacy, gave a presentation on the state of energy code adoptions at Convention. The DOE Building Energy Codes program provides educational resources to the public and the AIA will be working with PNNL staff to create similar training materials and coursework aimed directly at AIA members. While training for the advances in energy codes that are on the horizon is important, the presentation also highlighted the importance of getting involved with the development of the energy code before it hits the shelf. The AIA has set out to meet the challenge of achieving net-zero energy buildings by 2030, and the energy codes are, from the regulatory side, central to that challenge.

In her position as manager of DOE’s Building Energy Codes Program Technical Support Task Force, Cole answers questions on a daily basis by architects and other industry professionals –as many as 4,500 per year, and most of those inquiries address compliance with the current codes. Conover, the senior technical advisor at PNNL in its Energy and Environmental Division, spoke about what we can expect in “2020 and beyond” when energy codes may in fact be all outcome-based. With the federal mandate that all states meet 90 percent compliance by 2017, will you and your firm be ready?

Mayors Group Endorses Green Building Code

The IGCC is coming: your mayors have spoken.

At the US Conference of Mayors annual meeting in Oklahoma City last weekend, mayors in attendance unanimously adopted a resolution calling upon local governments “wishing to take a more holistic approach to incorporating energy efficiency, sustainable community planning and healthy and safe building practices into the codes to adopt the IGCC and consider its Standard 189.1 compliance path as base code in their jurisdiction.”

In the Energy Committee, there was a good deal of discussion of adopting residential green codes as well, and Jennifer Hosterman, mayor of Pleasanton, California, requested an amendment to reflect that the mayors would like to see a similar code for residential construction. The amendment was taken with no objection.

The USCM represents the will of local communities across the country – and their endorsement is evidence that the IGCC is a tool that is useful for their members – those just beginning their journey and those that have trod well-established paths toward sustainable practices.

“The IGCC needs the backing of leadership within local jurisdictions if it is to have any impact on the carbon footprint of the nation’s building sector, which accounts for almost 40 percent of America’s energy consumption and 72 percent of its electricity use,” said George H. Miller, FAIA, president of the AIA. “This resolution by America’s mayors is a huge step in that direction.

For more information on codes advocacy initiatives, contact Jessyca Henderson, director, Sustainability Advocacy.

After a successful launch at this year’s AIA Convention, the ArchiPAC Alumni Challenge will be extended through July 15. The Challenge, which raised more than $12,000 during the three-day annual meeting, is an opportunity for AIA members to support not only ArchiPAC, but also their alma maters by offering several scholarship contributions as the prizes for the top three schools.

By the end of Convention June 12, the University of Notre Dame had slipped past Auburn University into the first-place position. Recognizing the school’s win during the first part of the Challenge at Convention, ArchiPAC will guarantee that Notre Dame’s architecture school will receive at least a $250 scholarship contribution. However, Notre Dame can try to maintain its momentum and retain the top spot, which has a prize of $1,000. The second-place school will win $500, with the third-place school securing a $250 contribution.

“What’s a better incentive than helping ArchiPAC and helping your school?” asked Don Brown, AIA, 2010 ArchiPAC chair. Brown and other members of AIA leadership are urging AIA members to reach out to their classmates, alumni listservs, and school message boards to encourage more AIA member participation in the Challenge. The winning schools also will receive a letter that acknowledges which alumni participated in the Challenge and made the scholarship gifts possible.

For more information on ArchiPAC, the AIA’s only federal political action committee, and to see updates on the Challenge standings, visit www.archipac.org.

ArchiPAC relies solely on voluntary contributions from AIA members and staff. Contributions to ArchiPAC will not be used to fund the scholarship donations.

For more information, contact Hannah Wesolowski, manager, Political Programs.

The Initiatives Subcommittee of the Board Advocacy Committee (BAC), chaired by David Del Vecchio, AIA, has begun reaching out to groups within the organizational structure of the AIA in an effort to advance the full committee’s objective of creating a peer-to-peer network within the Institute.

The goal is to reach out to a variety of groups and begin to identify new and recurrent issues facing our membership. The subcommittee is interested in finding out what issues members deal with on a day-to-day basis, what the biggest challenges members have with rules and red tape, and how our national advocacy efforts can help. After compiling the information, an examination of the issues will help shape our future advocacy efforts.

The subcommittee has identified several target groups to be contacted in this initial effort (over time, the subcommittee hopes to expand this effort to other constituent groups within the AIA) and is compiling a list of questions to ask them. A variety of contact methods will be used – from listserv questions to face-to-face conversations to old-fashioned phone calls.

Taking the lead in these efforts:

• Lisa Richmond, executive director of AIA Seattle, will work with the Council of Architectural Component Executives (CACE), members of which AIA staff met informally during Convention;

• Peter Heimbach, AIA, of AIA Tennessee serves as the liaison to the BAC for the State Government Network (SGN) and will remain as the main point of contact for that group;

• David Del Vecchio, AIA, of AIA New Jersey will be the point of contact for the presidents’ listserv;

• John Rademacher, AIA, of AIA Ohio will contact the National Associates Committee (NAC); and

• William Roschen, FAIA, of AIA California Council will be contacting the Knowledge Communities (KCs).

For more information, contact Angie Taylor, director, State Relations.