Ok folks, since no answer was posted I had to dig deeper and will answer my own question:
Refer to AISC Engineering Journal, 1st Qtr, 2004; "Rationale Behind and Proper Application of the Ductility Factor for Bracing Connections Subjected to Shear and Transverse Loading". (I guess the guy in charge of making title brevity had the day off.)
To make a long story short, this paper presents research indicating bracing connection gusset plates, when welded directly
to a beam or column flange, will experience non-uniform stress distributions. The data was reduced to a 1.25 factor to be applied to the welds in such connections.
The AISC Manuals (both the Seismic Manual and Steel Construction Manual) have adopted the 1.25 value without the distinction of the gusset plate welded to the flange or the web of the member.
Therefore, when the gusset plate is welded directly to the framing member (column or beam), the weld force / stress should
be multiplied by 1.25 to account for non-uniform and peak weld stresses. However, the welds need not exceed what is required to develop the strength of the gusset. Furthermore, if peak weld stress for non-uniform weld stress situations is used, the peak stress need not be multiplied by 1.25. An example would be if the connection is subject to moment in addition to uniform tension and shear. The peak stress resulting from bending stresses combined with axial and shear stresses need not be multiplied by 1.25.
I hope this adequately answered my question.
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