IN THIS ISSUE

** 2002 LEGISLATIVE SESSION OPENS FEBRUARY 4TH
** GARVEE BONDS APPROVED FOR OKS AND TULSA PROJECTS
** NEW TASK FORCE TO STUDY TAX REFORM ISSUE
** CONSULTING CONGRESS DAY SET FOR MARCH 12-13
** ZAHL-FORD WINS CECO ENGINEERING EXCELLENCE GRAND CONCEPTOR AWARD
COBB ENGINEERING RECEIVES HONOR AWARD
** PARTIAL LIST OF SERVICES TO BE TAXED UNDER GOVERNOR'S PLAN
** SERVICES EXEMPT UNDER GOVERNOR'S PLAN

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2002 LEGISLATIVE SESSION OPENS FEBRUARY 4TH
Taxes, Redistricting, Budget to Highlight Session

The 2002 Legislative Session is set to kick off on Monday, February 4th, and it promises to be an interesting and politically-charged session.

With the Democrats holding a slim two-seat majority in the House, Republican members have new-found power in a year that will see taxes, budget woes and Congressional redistricting as the three major issues.

CONGRESSIONAL REDISTRICTING - This will be a major test for the two parties as Oklahoma's six congressional districts must be downsized to five. Congressman Wes Watkins (R-3rd) has announced his retirement, which seemingly make the issues easier by leaving five incumbents for five districts. However, the Democrats want to regain one or more of the seats and will do everything possible to protect Congressman Carson (D-2nd) while also drawing the lines to "even up" at least one of the other four districts. Rumor has it that at least one of the Democratic proposals would pit two Republican incumbents against each other, leaving one of the new districts wide open.

Republicans, of course, will do everything possible to thwart their rivals, and do have a couple of big "dogs" in the fight. One is the virtual tie in the House, and the second is the Governor. Keating is not going to let a Democrat redistricting victory be his legacy as he enters his last year in office. He is already threatening to veto almost any plan and let the judicial system draw the boundaries.

Action is expected relatively early in the session as filing deadlines are in June, with primary elections in August.

TAXES - As we reported in December, Governor Keating is proposing to eliminate the state personal income tax and sales tax on groceries, and replace it with a tax on professional services (see following list of taxable services). While he was hoping to address this issue during a special session in January, legislative leaders didn't heed his call, so now it will be addressed during the regular session.

The Senate leadership gave a mildly warm reception to the Governor's plan, but the House leadership threw cold water on it from the outset, and the consensus of political observers is that the Governor's plan is probably dead-on-arrival. But, that doesn't mean that the idea is dead. House Democrats have already floated their own "scaled down" version which would not go as far as Keating's plan.

Remember, it's an election year for all House members. That means that some effort will be made to pass some type of "tax relief" since that helps incumbent's reelection chances.

BUDGET WOES - Oklahoma is facing a shortfall in revenues, and state agency budgets are already taking a hit. Trying to balance these budgetary problems with the desire for tax relief in an election year will be interesting challenge.

As for issues of interest to CECO, some 1900 bills have been introduced for this session. Early on the radar are two bills which would increase the state gasoline tax to 19 or 22 cents per gallon.

The sales tax on professional services will be an issue we watch closely. The CECO Board of Directors discussed this issue at their January 24th meeting, and given DOA prognosis for the Governor's plan, decided to take no position on the issue at present. CECO will, however, be following the issue closely, and may revise that position as the session progresses.

One other possible issue CECO faces is a move to make some changes in the state's qualifications-based selection process. A "shell" bill has been introduced which would make some modifications which may be of concern to CECO. We will be discussing this with the bill sponsor to see what he is trying to accomplish with the bill, and will let you know if it is a full-blown threat to QBS.

CECO will be going through the "weeding out" process once all of the bills are filed, and will provide members with a full update next month. Committee hearing will begin next week, and if something serious comes up we will post updates on the CECO website and notify you by e-mail. Until then, if you have any questions, don't hesitate to call the CECO Office.

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GARVEE BONDS APPROVED FOR OKC AND TULSA PROJECTS

Oklahoma City and Tulsa will be able to continue with major road projects estimated at a cost of $250 million in bond funding.

The official action was taken Friday, February 1st by Governor Frank Keating, Senate President Pro Tempore Stratton Taylor, D-Claremore, and House Speaker Larry Adair, D-Stilwell during the board's meeting.

The agreement will allow the projects to be funded with grant anticipation revenue bonds (GARVEE). The Tulsa project will be I-44 beginning at the Arkansas River Bridge and will extend east to Yale Avenue at a cost of $125 million. The Oklahoma City project will be US 77 from just north of NE 63rd Street south to NW 36th Street for the same cost.

"The projects are of great economic significance to our state's two large, growing urban areas," Keating said. "They will help attract business and jobs that are crucial to the economic future of Oklahoma. If we build it, they will come."

Keating said infrastructure has always been a priority of his administration and he pointed that his goal of connecting all towns in Oklahoma with populations of more than 10,000 people to the interstate highway system with four lane roads.

Taylor said the improvements were needed and will now be addressed. He added that the economy will also benefit from the projects. "This should be a great boost to the economic development efforts of our state," Taylor said. "By implementing both phases of the GARVEE plan, we will be able to address some much needed highway improvements in both the rural and urban areas of Oklahoma."

Adair said the expansion projects are critical for Oklahoma and that transportation issues are a top priority for the state. "Advances in transportation are top priorities for all areas within the state of Oklahoma," Adair said. "This current proposal addresses two critical transportation expansion projects within the Oklahoma City and Tulsa areas which are necessary for the overall infrastructure expansion in the state."

The notes shall not become a general obligation of the state and must be paid with anticipated federal highway funding only. This is stipulated by the GARVEE process.

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NEW TASK FORCE TO STUDY TAX REFORM ISSUE

A task force made up of legislators and citizens appointed by the Governor and legislative leaders will examine the issue of tax reform and prepare a final report by mid-April.

The 32-member panel will determine whether Oklahoma's tax policy can be modified in a manner that would stimulate economic growth without lowering revenues. If so, the task force will then recommend specific changes that would attain those goals.

"This is the best and most productive way to proceed with the vital issue of tax reform," Keating said. "We will bring together legislators, business and civic leaders from across the state to hear the various proposals and recommend what is best for Oklahoma."

Keating pointed out that his personal choice would be to eliminate the state income tax completely, but he said general tax reform was the more issue. Keating said he eagerly anticipated the final report in April.

President Pro Tempore Sen. Stratton Taylor, D-Claremore, applauded the efforts of Keating and House Speaker Larry Adair, D-Stilwell, and said tax reform was an important topic for Oklahoma. "I think it's important for us to continue our discussions on tax reform," Taylor said. "This task force will help us advance the debate and improve the chances of reaching a consensus."

Adair said he supported the idea of tax reform, but said there should be caution in ensuring that certain groups of people weren't unfairly treated through changes in the tax base.

"A number of tax reform proposals have been submitted and studied over the past several months," Adair said. "House democrats support fair and equitable tax relief, but tax breaks cannot be given to one group at the of other Oklahoma citizens. Reforming our tax code must be carefully drafted so every Oklahoman benefits. It is also important to protect our tax base in order to provide needed services to Oklahomans."

The deadline for the final report will be April 12 and will be submitted to the Governor and legislative leaders at that time.

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CONSULTING CONGRESS DAY SET FOR MARCH 12-13

CECO will again be participating in the annual ACEC Consulting Congress Day (CCD) activities, March 12th and 13th. CCD is the premiere legislative conference of the engineering industry.

Congress will address issues in 2002 that will affect the bottom line at your firm including, OUTSOURCING OF ENGINEERING SERVICES, INFRASTRUCTURE FUNDING, PROCUREMENT REFORM, and REGULATORY STREAMLINING.

CECO will be arranging meetings with all eight members of the Oklahoma Congressional Delegation, which will be your opportunity to discuss important issues directly with your elected officials. This is a once-a-year opportunity to show a strong, united industry presence to America's decision makers. With so much at stake in 2002, your participation is critical.

In addition to the CCD activities, ACEC will host two other major events concurrently. The annual Federal Markets Conference will be held on Monday, March 11th. The federal government generates billions of dollars of business for engineering firms annually. Key officials of the Corps of Engineers, Naval Facilities, General Services and other federal agencies will brief attendees on the latest business opportunities, changes in procurement policy, and the impact of the September 11th attacks on budget priorities.

Also, ACEC will host the annual Engineering Excellence Awards gala on Tuesday evening, celebrating the nation's most significant engineering achievements of the past year. President George W. Bush has been invited to join in honoring the awards winners and to give special tribute to those engineers who were directly involved in the aftermath of September 11th.

All events will be held at the Grand Hyatt Washington in downtown DC, conveniently located near the White House and Capitol Hill and easily accessible by Metro. The hotel is offering ACEC meeting attendees a discounted room rate of $205 single/double occupancy; contact the hotel directly at 202-582-1234 or 1-800- 233-1234 for reservations. Call by February 15, 2002 and reference ACEC to receive the discounted rate.

Registration information has been mailed to all and is also available on the ACEC website, http://www.acec.org.

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ZAHL-FORD WINS CECO ENGINEERING EXCELLENCE GRAND CONCEPTOR AWARD
COBB ENGINEERING RECEIVES HONOR AWARD

Zahl-Ford, Inc., Oklahoma City, won the 2001 Grand Conceptor Award in the CECO Engineering Excellence Awards Competition. The structural consulting and investigative engineering firm, won an Grand Conceptor Award for its design of the Oklahoma City Civic Center Music Hall Renovation.

The 270,000 sq. ft. building was originally constructed in 1937 as a 6,000 seat municipal auditorium. In 1968, the building was substantially remodeled as a venue for stage productions and the seating was reduced to 3,200. The latest renovation project required demolition and reconstruction of approximately 90% of the floors and walls in the interior of the building and in-place strengthening of the roof structure.

Zahl-Ford, Inc. also provided construction engineering services which included developing phasing and bracing plans for the demolition and reconstruction of the interior of the six-story building. These plans provided techniques that permitted the demolition of virtually the entire interior of the building between the exterior walls, from the basement floor to the existing roof framing.

Cobb Engineering Company, Oklahoma City, was presented an Honor Award by CECO for the Oklahoma State Capitol Complex Improvement Study.

The study led to the development of a Master Plan for the Capitol Complex which includes ten specific enhancement projects for the Complex. Enhancement projects include: Americans with Disabilities Act compliance for the Complex; Construction of a landscaped pedestrian Plaza around the "Petunia" Oil Well Site; entry improvements to the State Capitol Building; and, improved streetscape, landscaping and lighting for the Complex, plus other features.

Both projects have been entered in the national ACEC Engineering Excellence Awards Competition. Winners in the national competition will be announced on March 12th at a gala dinner in Washington, D.C.

Our congratulations to Zahl-Ford and Cobb Engineering Company on their awards, and best wishes in the national competition.

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PARTIAL LIST OF SERVICES TO BE TAXED UNDER GOVERNOR'S PLAN

Construction
Building Construction - General Contractors and Operative Builders

1541 General Contractors - Industrial Buildings and Warehouses
1542 General Contractors - Nonresidential Buildings, other than
Industrial Buildings and Warehouses
1522 General Contractors - Residential Buildings, other than Single Family
1521 General Contractors - Single Family Houses
1531 Operative Builders

Heavy Construction Other Than Building Construction - Contractors (Non-Government Contracts)
1622 Bridge, Tunnel and Elevated Highway Construction
1629 Heavy Construction, NEC
1611 Highway and Street Construction, Except Elevated Highways
1673 Water, Sewer, Pipeline and Communications and Powerline Construction

Construction - Special Trade Contractors
1751 Carpentry Work
1771 Concrete Work
1731 Electrical Work
1794 Excavation Work
1752 Floor Laying and Other Floor Work, NEC
1793 Glass and Glazing Work
1796 Installation or Erection of Building Equipment, NEC
1741 Masonry, Stone Setting and Other Stone Work
1721 Painting and Paper Hanging
1742 Plastering , Drywall, Acoustical and Insulation Work
1711 Plumbing, Heating and Air Conditioning
1761 Roofing, Siding and Sheet Metal Work
1799 Special Trade Contractors, NEC
1791 Structural Steel Erection
1743 Terrazzo, Tile, Marble and Mosaic Work
1781 Water Well Drilling
1795 Wrecking and Demolition Work

Electric, Gas and Sanitary Services
4911 Electrical Services
4922 Natural Gas Transmission
4923 Natural Gas Transmission and Distribution
4924 Natural Gas Distribution
4925 Mixed, Manufactured, or Liquified Petroleum Gas Production and/or Distribution
4931 Electric and Other Services Combined
4932 Gas and Other Services Combined
4939 Combination Utilities, NEC
4941 Water Supply
4952 Sewerage Systems
4953 Refuse Systems
4959 Sanitary Services, NEC
4961 Steam and Air Conditioning Supply
4971 Irrigation Systems

Real Estate
6512 Operators of Nonresidential Buildings
6513 Operators of Apartment Buildings
6514 Operators of Dwellings Other Than Apartment Buildings
6515 Operators of Residential Mobile Home Sites
6517 Lessors of Railroad Property
6519 Lessors or Real Property, NEC
6531 Real Estate Agents and Managers
6541 Title Abstract Offices
6552 Land Subdividers and Developers, Except Cemeteries
6553 Cemetery Subdividers and Developers

Services
Hotels, Rooming Houses, Camps and Other Lodging Places
7011 Hotels and Motels
7021 Rooming and Boarding Houses
7032 Boarding and Recreational Camps
7033 Recreational Vehicle Parks and Campsites
7041 Organization Hotels and Lodging Houses, on Membership Basis

Personal Services
7241 Barber Shops
7231 Beauty Shops
7217 Carpet and Upholstery Cleaning
7215 Coin-Operated Laundries and Dry Cleaning
7216 Dry Cleaning Plants, Except Rug Cleaning
7261 Funeral Service and Crematories
7212 Garment Pressing, and Agents for Laundries and Dry Cleaners
7218 Industrial Launderers
7219 Laundry and Garment Services,NEC
7213 Linen Supply
7299 Miscellaneous Personal Services, NEC
7221 Photographic Studious, Portrait
7211 Power Laundries, Family and Commercial
7251 Shoe Repair Shops and Shoe-Shine Parlors
7291 Tax Return Preparation Services

Business Services
7322 Adjustment and Collection Services
7311 Advertising Agencies
7349 Building, Cleaning and Maintenance Services, NEC
7389 Business Services, NEC
7336 Commercial Art and Graphic Design
7335 Commercial Photography
7376 Computer Facilities Management Services
7373 Computer Integrated Systems Design
7378 Computer Maintenance and Repair
7374 Computer Processing and Data Preparation and Processing Services
7371 Computer Programming Services
7379 Computer Related Services, NEC
7377 Computer Rental and Leasing
7323 Credit Reporting Services
7381 Detective, Guard and Armored Car Services
7331 Direct Mail Advertising Services
7342 Disinfecting and Pest Control Services
7361 Employment Agencies
7359 Equipment Rental and Leasing,NEC
7353 Heavy Construction Equipment, Rental and Leasing
7363 Help Supply Services
7375 Information Retrieval Services
7352 Medical Equipment Rental and Leasing
7383 News Syndicates
7312 Outdoor Advertising Services
7334 Photocopying and Duplicating Services
7384 Photofinishing Laboratories
7372 Prepackaged Software
7313 Radio, Television and Publishers' Advertising Representatives
7338 Secretarial and Court Reporting Services
7382 Security Systems Services

Automotive Repair, Services and Parking
7521 Automobile Parking
7533 Automotive Exhaust System Repair Shops
7536 Automotive Glass Replacement Shops
7539 Automotive Repair Shops, NEC
7549 Automotive Services, Except Repair and Carwashes
7537 Automotive Transmission and Repair Shops
7542 Carwashes
7538 General Automotive Repair Shops
7515 Passenger Car Leasing
7514 Passenger Car Rental

Legal Services
8111 Legal Services

Social Services
8351 Child Day Care Services

Membership Organizations
8611 Business Associations
8641 Civic, Social and Fraternal Associations
8631 Library Unions and Similar Labor Organizations
8699 Membership Organizations, NEC
8621 Professional Membership Organizations

Engineering, Accounting, Research, Management and Related Services
8721 Accounting, Auditing and Bookkeeping Services
8712 Architectural Services
8748 Business Consulting Services
8732 Commercial Economic, Sociological and Educational Research
8731 Commercial Physical and Biological Research
8711 Engineering Services
8744 Facilities Support Management Services
8742 Management Consultant Services
8741 Management Services
8733 Noncommercial Research Organizations
8743 Public Relations Services
8713 Surveying Services
8734 Testing Laboratories

Services, Not Elsewhere Classified
8999 Service, NEC

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SERVICES EXEMPT UNDER GOVERNOR'S PLAN

Advertising, Agricultural Services and Production, Mining & Quarrying, Oil & Gas Extraction, Manufacturing, Furniture, Transportation Equipment, Transit, Freight Transportation, Transportation Services, Federal Banks/Credit Unions.

Also, Health Services (inclusive of Medical, Dental, Optometric, etc), Social Services, Political and Religious Organizations, and Government.

This is a partial list showing only major categories.

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