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Structural Engineering License Qualifications to Change

The Washington Department of Licensing (DOL) has issued a press release stating that “examinations that are presently used by the state of Washington to qualify individuals for licensure in structural engineering will be changing.”

For questions regarding the changes please send your inquiries via email ONLY to this address: engineers@dol.wa.gov. The DOL will respond and include the question/answer in all future notices.

Starting in April 2011, the primary structural licensing examination for WA will be the examination developed by the National Council of Examiners for Engineering and Surveying (NCEES).

The last offering of the NCEES Structural II examinations will be October 2010.

The new exam will be offered every April and October starting in April 2011.

For more information and answers to frequently asked questions you can visit the DOL website here and click on the Changes to Structural Exam PDF.

Buy American Rule could Cause Problems for WA

According to a Puget Sound Business Journal (PSBJ) article, "Washington state business leaders are stepping up their warnings that the 'Buy American' provisions of the federal stimulus act could backfire on U.S. companies."

Don Brunell, president of the Association of Washington Business, is quoted in the article describing just how difficult it is for Washington companies to create anything made only of parts from the United States because so many "rely on global supply chains."

The biggest concern for Washington State is retaliation from Canada and/or the inability to use Canadian materials. The article notes that Canada was "the state’s largest trading partner last year" and exported over "$9.1 billion in exports."

The PSBJ states that the "issue is likely to pick up steam as more stimulus money ripples out across the nation this summer, and may be a concern in trade-dependent but relatively union-friendly Washington."

Read the article here.

On a lighter note... Making Pizza with Peter

"Former Seattle City Council member Peter Steinbrueck has been making pizza since he was ten—which, by my rough count, means he’s spent nearly four decades perfecting his pizza technique. Recently, Steinbrueck invited FoodNerd over to his house—a modest rambler near Northgate with an envy-inducing backyard garden—to make and share a few pies."

Click here to read the rest of this pizza making adventure published on Publicola.

Revenue Forecast Predicts Another Decrease

A press release published yesterday, June 18, by the State of Washington Economic and Revenue Forecast Council (ERFC), states that it “appears that we are finally approaching the end of this Great Recession.” This prediction regarding the end of the financial is based on “claims for unemployment insurance” peaking and “monthly job losses are diminishing.”

However, the release states that the bottom is still lower than predicted in March. The forecast goes on to state that “job losses will likely continue through the end of this year.” And, according to the EFRC, when the economy does rebound the improvement is likely to be gradual.

The predication also stated that the General Fund forecast for the biennium is “$27.2 billion” which is $185 million less than projected. Many newspapers have noted that Governor Gregoire intends to make even deeper budget cuts, payroll cuts, and to cap hiring because of the decrease.

Paperless Reporting is Now Mandatory

The National Council of Architectural Registration Boards (NCARB) will not accept paper employment verifications (Form 123) from interns in the Intern Development Program postmarked on or after 1 July 2009.

All interns will be required to use the online electronic Experience Verification Reporting (e-EVR) system to document their IDP experience after this date.

Please spread the word to your interns. You can contact us with questions at info@aiawa.org or you can visit the NCARB website.

Desperate times equal low bids on public works

An article on TDN.com highlights how “public works contracts are coming in well below agency estimates, even in cases were estimates were adjusted downward for the lousy economy.”

The TDN.com quotes Kurt Henthorn, president of the Lower Columbia Contractors Association, saying, “contractors are not taking any real profit margin. They’re just trying to keep the doors open and people working. Everyone is just down to their core people.”

But, according to the article, what is a crisis for the construction industry is seen as a boon for others. The article states that the public is “getting a respite from high construction prices earlier this decade.” And, it goes on to note that “statewide, lower bids are allowing transportation officials to stretch federal stimulus dollars and undertake extra infrastructure projects.”

However, according to the story, stimulus dollars aren’t creating as many jobs as was hoped for. Henthorn states, “It has not seemed to get people off the dime like we thought it would.”

Read the whole story here

It's Filing Week for 2009 Primary & General Election

Yesterday marked the first day of filing for the 2009 elections. This includes local government, municipal and county offices (except in Pierce County), cities, school districts and special purpose districts.

There are also mayor's elections in Seattle and Tacoma, county executive in King County and a special election for auditor in Pierce County. Filing ends Friday. The primary is August 18 and the general election is November 3.

You can see who has filed at these links:

Secretary of State
Pierce County
King County

Summary of New Tax Legislation Available Now

The Department of Revenue issued a summary today detailing new tax legislation enacted during the 2009 legislative session.

The Department generates the tax summaries annually to help make businesses aware of changes to the state tax system. The 2009 summary covers 43 bills and their projected fiscal impact over the next four years. You can read it here.

Additional information on specific legislation that replaces resale certificates with sellers’ permits, clarifies the taxation of digital products, and requires monthly taxpayers to file and pay their taxes electronically, is available at http://dor.wa.gov/.

The 2009 CDA Winners are Part of a Nation Wide Trend

The AIA Washington Council held it's annual Civic Design Awards (CDA) on Thursday, May 14, 2009 at the ACT Theater in downtown Seattle. Eight awards were handed out to local firms and agencies. Each design was praised for its transparency which was especially noted as a grand contribution to schools, where vibrant design can be a tactile encouragement of children's growth.

This exciting focus on sustainable design of schools is leading a nation wide trend. According to a recent article in the New York Times, “school districts across the county are experimenting with new construction and renovations that save energy as well as improve educational facilities.”

The 2009 CDA winners continue to demonstrate how environmental awareness can still function beautifully for a community. For more information about the winners, and to see pictures of the winning projects please visit our website.

L&I Begins Campaign to Help Homeowners

The Department of Labor and Industries (L&I) is doing its part to help with the problem of residential construction when homeowners who used unregistered and unqualified contractors get burned.

L&I recently published a press release that offers good advice on finding a contractor and explains that the “lowest price isn’t always a good deal.” The Department is also beginning an ad campaign that started May 22 and will include radio ads, print ads, and billboards.

Landmark Efficiency Legislation, Supported by the AIA|WA, to be Signed Today

AIAWA supported, testified, and worked endlessly to get SB 5854, designated the Efficiency First Bill, through the legislature this session.

Today the efforts will result in success when the bill gets signed by Governor Gregoire at 10:30 a.m. AIA members, and members of environmental groups, will be present during this significant event.

This legislation marks a turning point for Washington as the state will now be a leader in environmental building methods. The bill pushes for the 2030 goal set by the AIA National. Although specific percentages aren’t set, an annual reduction mandated in the bill of slow and steady reductions, will produce 70 percent more efficient construction in all new homes and commercial buildings by 2031. Washington will have attained the National goal within one year of the ideal.

The bill produces another result that is highly important during the current economic crises: the creation of jobs. According to a recent Puget Sound Business Journal article this legislation, “could generate a business bonanza for companies ranging from architects and engineers to mechanical contractors.”

The article goes on to state that, “the American Council for an Energy-Efficient Economy says that increasing buildings’ energy efficiency 20 percent by 2020 could create 800,000 jobs nationwide. A 70 percent efficiency increase, as called for the legislation, would have a greater impact.

In the Seattle-King County area, a report by the Seattle Jobs Initiative said that the building industry will add 2,200 jobs, focused in whole or in part on energy efficiency, between 2009 and 2016.” (You can read a PDF of the entire article here.)

The AIAWA will continue to work for legislation that is profitable and impactful for both architects and the environment; and to ensure that goals set by this legislation will be followed. Our thanks goes out to all those members who helped make this law a reality through hard work and dedication.

3 Days Left Until the Legislature Adjourns

The major tax increase bills are having a tough time getting the votes to pass. Senate Majority Leader Lisa Brown said today that the income tax bill is dead for this year. The News Tribune is reporting that there are not enough votes in the House to pass any tax referendum this year. Since they are referenda, they only need a simple majority to get through the legislature. But, there are not enough Democrats supporting them to send the taxes to the voters.

That leaves SB 6173, to change the way contractors collect and remit sales tax. The fiscal note was revised yesterday from $40 million the first two years to $100 million, $450 million over the next 6 years. The AIA|WA, contractors and retailers worked today with the House to significantly improves the bill. All direct impacts on architecture firms were removed. The process was improved for contractors and retailers. Much work will need to be done on the rulemaking. But, it is a dramatically better bill. The House passed it with bipartisan support.

On the budget, the House and Senate Democrats reached an agreement last night on the operating budget. The House Democrats announced today that the operating budget will be voted on Friday and the Capital Budget on Saturday. No word on the timing of the final vote on the transportation budget; likely it will be Saturday or Sunday. They have not released any public documents on any of the three major budgets – possibly late tonight. So, we don’t know what’s in and out of them. We are especially interested to know if the design projects are back in the capital budget. House Chair Hans Dunshee has been fighting for more design projects. The question is whether the Senate Chair Margarita Prentice or the lead on the capital side, Senator Karen Fraser, will agree to restore the design projects.

The House late last night passed the bill to fund the deep bore replacement tunnel for Alaskan Way in Seattle. Since the bill was amended it will go back to the Senate for final passage, which is expected to concur. There were some anti-Seattle amendments attached, namely requiring Seattle taxpayers to fund any cost overruns on the project (even the state-funded portions). But, that was the only way it could get out of the House. Interestingly, Chopp was the lead proponent of that little amendment. After it passed, he voted against the bill, anyway.

Rep. Mike Armstrong (R-Wenatchee) was hospitalized last night after suffering a mild heart attack. He had surgery today to put in a stint. The word is that he is doing well. Please keep him in your prayers.

$100 Million Construction Tax Increase Analyzed

SB 6173, sponsored by Sen. Margarita Prentice, would change the resale certificate to a sellers permit. This measure will increase up-front costs by nearly 10% to contractors, an industry that is under substantial pressure due to the economy.

The state will incur additional administrative costs at a time when it is cutting programs. Penalties will increase under this measure to 100% of the tax value and sends a contrary message to the efforts of the Senate earlier this session to reduce paperwork violations for small employers.

The business, design and contracting groups believe the changes in this bill are unnecessary and efforts to raise revenues should be placed on job creation and business expansion instead of increasing penalties and the establishment of new programs.

The fiscal note indicates that the bill will increase construction costs by over $100 million in the next two years. Over 6 years, the bill will increase constructions costs by over $450 million. That is just for the state portion of the sales tax. The local government fiscal note has not been completed. We can expect that the local portion will be a huge hit as well.

SB 6173 purports to improve sales tax compliance but really targets construction contractors by eliminating the resale certificates and not allowing the state to issue the new seller’s permit to construction contractors. This may not be an official “tax increase,” but it is an added cost to construction contractors because the sales tax must be paid upfront for purchases of goods which then will be resold to the project owner and taxed.

Contractors will be forced to “float” revenue to the state, and will undoubtedly lose money due to the lag time experience on the credit exchanges. Tremendous cost increases and administrative difficulties will also result when trying to track and account for various transactions during the process of a project. All contractors will be penalized in the attempt to get at a few who are breaking the rules. There are better alternatives.

The construction industry is one of the few industries that will continue to play a significant role in the state’s economic recovery. It purchases goods, sells goods, employs skilled and unskilled workers, and is one of the largest contributors to the state’s tax coffers in the way of business taxes and payroll taxes.

This upfront tax payment will also add upfront costs to public project owners and the State. Many small contractors are working on a very slim profit margin, and the added upfront cost required in SB 6173 will be a real hardship, and it could result in more contractors laying off more workers and/or closing their doors, putting everyone in the firm out of work. In most cases, the sales tax for purchases during construction will be significant.

In a fragile economy, this is not the time to cripple the construction industry more by adding a cost that is unfairly targeted to only the construction industry.

Massive Construction Tax Increase Moving in Legislature

In 7 days, SB 6173 was introduced, passed out of the Senate and now is out of the House Finance Committee on its way to the House floor. This is definitely a bill on the fast track. It is request legislation from Governor Chris Gregoire.

SB 6173 would be a massive tax increase on construction projects: more than $100 million over 4 years.

The committee hearing today was interesting. The only proponent for the bill was the WA Department of Revenue. Those testifying against the bill included the AIA|WA and groups representing engineers, contractors, retailers and union workers. In other words it the entire private sector is against the bill and only the agency responsible for collecting the money was for it.

While the bill passed out 7-3, on a party line vote, several Democrats spoke of significant concerns with the bill. Representatives Santos, Ericks and Springer all said that they are only voting to move the bill forward and are not committing to supporting the bill on the House floor. They called for a lot work to be done to improve the bill before it moves further.

The Republicans on the committee all voted against the bill, citing its massive impacts on the construction industry.

The bill now goes to the House Rules Committee, which determines which bills go to the floor.

Those paying close attention may note that this bill is moving after all of the normal legislative deadlines have passed. It has been deemed “necessary to implement the budget,” and thus, is exempt from the deadlines. Look for a more detailed review in another post.

Also, normally a tax increase requires a two-thirds vote of the legislature or a vote of the people. Because this is framed as a change in the way taxes are collected, it in not deemed to be a tax increase.

Legislature Passes Efficiency First Bill-SB 5854

The Senate passed SB 5854, Efficiency First, bill, sending it to the governor. The governor is expected to sign the bill into law. Here is a quick summary of the bill as passed.

1. Energy codes

Residential and non-residential construction permitted under the 2031 Code must achieve a 70 percent reduction in energy use, using the 2006 Code as the baseline. The Council must adopt state energy codes between 2013 and 2031 that incrementally move the state towards achieving the 2031 Code standards.

2. Strategic Plan

The Department of Community, Trade and Economic Development (DCTED) must develop and implement a strategic plan for enhancing energy efficiency and reducing greenhouse gas emissions from homes, buildings, districts, and neighborhoods. This plan must be used to direct future increases in the Code.

3. Commercial building benchmarking

Beginning January 1, 2010, qualifying utilities must maintain records of energy consumption data for all non-residential and qualifying public agency buildings for which they provide service. Upon receiving authorization from a non-residential building owner or operator, the qualifying utility must upload all of the energy consumption data associated with that building to the Portfolio Manager. Non-public, non-residential building performance data must be uploaded either in 2011 or 2012, depending on the size

4. Public buildings

Establishes performance standards, benchmarking, and other reporting requirements for public buildings. Any reporting public facility with a National Energy Performance Rating score below 50 must undertake a preliminary energy audit by July 1, 2011. If potential cost-effective energy savings are identified, an investment grade energy audit must be completed by July 1, 2013, with implementation of the cost-effective energy conservation measures by July 1, 2016.

5. Leased public buildings

A qualifying public agency may not enter into a new lease or a lease renewal on or after January 1, 2010 for a facility with a National Energy Performance Rating score below 75, unless: (1) a preliminary energy audit has been conducted within the last two years; and (2) the owner or lessor agrees to perform an investment grade audit and implement any cost effective energy conservation measures within the first two years of the lease agreement, if such measures are identified in the preliminary audit.

New Tax Bills Introduced

Although the legislative season is quickly coming to a close, new tax bills have been introduced.

The bill that is getting the most attention, HB 2377, would impose a 2 year increase in the sales tax rate of 0.3 cents per dollar. This money would be dedicated to education spending.

Another bill, HB 2354, would impose a property tax on “intangible property.”

While the official fiscal note is not available, the intent section of the bill claims that it would raise $4 billion a biennium. Please take a moment to review the bill and send your thoughts to me.

There are questions of whether certain parts of the bill would enforce firms to move from cash to accrual accounting, make Owner/Architect Agreements taxable as soon as they are executed, and tax stocks/bonds.

These tax bills would dedicate the increase to education and health care. The AIA is monitoring their progress and will keep you updated.

Could Your Professional Liability Insurance Be Voided by a Proposed Law?

The legislature has been debating residential construction liability measures for the last few years. The latest bill to tackle this issue is E2SHB 1393. The bill as amended in the Senate would effectively void architects’ professional liability insurance.

The AIA|WA asked Victor O Schinnerer & Company to analyze the bill. Schinnerer is one of the nation’s premier providers of professional liability insurance for architects and engineers. They found that several of the bill’s provisions would leave architects without insurance coverage.

Regarding warranties and guarantees Schinnerer states,

“Professional liability policies do not cover express warranties or guarantees. Any allegation of breach of warranty would neither be defended by a professional liability insurance policy nor could any party suffering a loss based on the allegation of breach of warranty ever recover damages under a professional liability insurance policy.”

This is a lose-lose situation where the claimant and the defendant are exposed with no protection and no way to recover their expenses.

Regarding the fraud exclusion from the statute of repose they state,

“In addition, the CNA Policy – and to my knowledge all similar professional liability insurance policies – exclude from coverage any allegation of fraud. Therefore, legislation that creates a cause of action against design firms based on fraud and allows that cause of action to exist beyond any statute of repose places that firm at risk in perpetuity for an uninsurable exposure.”

Again, regardless of which party wins a suit, both parties lose. The claimant cannot recover damages and the defendant bears the crippling cost of defense.

The letter goes on to state that this legislation would lead to the loss of insurance for architects and engineers:

“It is highly likely that if this legislation were enacted, many design firms providing residential design services in the State of Washington will find that insurers will be unable to provide coverage to defend them at an acceptable cost.”

E2SHB 1393 is pending on the Senate floor calendar and could be voted on as soon as Monday.

AIA/WA Testifies on a New Bond Bill

Rep. Hans Dunshee introduced a new bond bill, HB 2334, to fund higher education and elementary and secondary education projects. The bill focuses on “funding construction of safety, health, and energy-saving improvements to public facilities.” In addition, the bill says that “energy efficiency projects shall take priority” for funding.

AIA/WA testified in support of the goals of this legislation today the House Capital Budget Committee. Video of the testimony will be available here soon. For now you can listen to testimony by clicking below.

The money and purposes of projects in this legislation are certainly needed. The proposed state budget transfers $750 million out of the Capital budget and into the operating budget. That is creating a significant long-term problem for capital projects.

The AIA/WA also has a few concerns namely: accountability provisions in the bill and the section on “performance based contracting.”

The legislation supplies funds for building regardless of demonstrated value or worthiness of projects. Further, the bill does not ensure that institutions taking these funds, and making improvements, have a long term master plans for the buildings that will keep them from building inadequate facilities that they can’t alter cost effectively for a long time.

In summary, the design and construction monies in this bill are needed. Saving energy and improving health and safety are worthy endeavors. But, they are just a part of the purposes for which our buildings are built and operated.

Senate and House Release Damaging Budgets

The House and Senate Capitol Budget’s were released April 1. Both bills could negatively affect architects. The AIA/WA has testified in hearings for both. You can see the testimony in the House Capitol Budget Committee below. AIA/WA has also contacted House and Senate Committees responsible for creation of the budget with our grave concerns.


Budget Concerns for Architects
The Senate Budget assumes $743 million in Capital monies being transferred to the Operating Budget. Most of the monies are backfilled using bond revenue. The Senate is taking cash that they would normally use to pay for capital projects this biennium and transferring it to the general fund. They will then use long term bonds for one time revenue and put that money back into the Capital Budget.

It is like using your Visa to pay your American Express. You incur long-term debt for what is otherwise a onetime expense. Even with the backfill of some of the programs using bonds, it creates a negative bow-wave for construction and reduces the total number of projects that can be funded in the capital budget.

Even more alarming is the fact that these budgets do not balance design and construction services. A key principle articulated in the budget description for higher education projects effectively eliminates funding for pre-design funding. The section reads “create construction jobs now by targeting investments to projects that will create jobs sooner rather than later. This principle is operationalized in the Senate proposal by prioritizing projects that are closer to being ‘shovel ready’ over those that are not, and by authorizing no pre-design and very few design projects, in order to provide as much funding as possible for construction.”

It is very shortsighted to not plan for future construction. In past recessions, public projects have been a bridge to when private construction restarts. The AIA/WA will continue to urge the legislature to rethink the cuts to pre-design and design and the transfer of Capital monies.