NAM
MEMBERS TO BENEFIT FROM BONUS DEPRECIATION, AMT
RELIEF
Your company will benefit
from bonus depreciation and AMT relief, thanks to a bill that
passed the House 3/7—by vote of 417-3—and the Senate, on an
85-9 vote, a day later. While narrower than previous
House versions, the compromise bill includes provisions of
benefit to NAM members. President Bush will sign it into
law. It will:
Over the next three
years, allow bonus first-year depreciation of 30 percent of
the value of new investments made after 9/10/01 and before
9/11/04. The NAM has been actively lobbying for such
improved depreciation.
Extend the NOL
carry-back period to five years (from two years) for NOLs
arising in taxable years ending in 2001 and 2002. NOLs
are net operating losses.
Provide two forms of
temporary corporate AMT relief. First, it will specify that
the new, temporary first-year depreciation deduction is
available for both regular and corporate AMT
payers. Second, it will suspend for two years the AMT
NOL 90 percent limitation.
Extend several expired
tax provisions retroactively, most notably a five-year
extension of deferral for active financing income.
Provide a temporary
solution to the problems that sponsors of defined-benefit
pension plans have experienced due to the low rates on
30-year Treasury bills. It is the same response as was
included in the last House stimulus bill.
SENATE ENERGY FLOOR ACTION
COULD LAST SEVERAL WEEKS
The long-awaited Senate
floor action on energy began 3/5. Votes on S. 517’s most
contentious issues—ANWR exploration, corporate average fuel
economy (CAFE) standards, electricity restructuring and
climate change—are possible the week of 3/11. Debate is
likely to last until Congress adjourns for its spring recess
on 3/22 and could resume in mid-April—especially if Majority
Leader Tom Daschle (D-SD) decides to take up other bills
(i.e., campaign finance) before completing action on S.
517.
At press time, the Senate
had adopted numerous changes to S. 517, including:
A Daschle amendment
requiring the proposed Alaska natural gas pipeline to follow
the southern route;
A Voinovich (R-OH)
nuclear liability amendment;
A Craig (R-ID) fusion
research amendment; and
A Bingaman (D-NM)
amendment requiring an EPA study on hydraulic
fracturing.
If the majority leader is
unsatisfied with the direction the bill is taking, he may bury
it for the remainder of the Congress. It is essential
that there be continued pressure on the Senate to complete
action on an improved, comprehensive bill, which would go to
conference with the strong House-passed bill. To read
the Administration’s views, NAM talking points or the bill
itself, visit http://www.nam.org/senateenergy.
NAM contact: Mark Whitenton, mwhitenton@nam.org.
NAM energy tax contact: Monica McGuire, mmcguire@nam.org.
Two hundred possible
amendments await senators as they tackle the Daschle energy
bill, S. 517. Several amendments are of critical
importance to NAM members. We’ve notified senators these
amendments are possible Key Manufacturing Votes:
·Modifying the bill’s
provisions dictating higher CAFE standards (up to 35 MPG for
both cars and light trucks).
·Changing the bill’s
requirements that 10 percent of all electricity must be
generated by a renewable portfolio by 2020. This
provision would essentially require that one-third to
one-half of new electric generating capacity be wind power
or biomass.
·Adjusting existing
provisions that advance domestic compliance with the Kyoto
Protocol.
·Adding a provision
allowing environmentally sensitive development of ANWR –
which is not in Daschle’s bill.
The NAM opposes the
extension of Customs user fees, which has been discussed, to
pay for expenses unrelated to the activity such fees were
intended to cover. Likewise, we have long opposed
reinstatement of Superfund taxes without comprehensive
programmatic changes. A 3/6 NAM/business community
letter to Senate leaders opposed reinstatement. Any
votes that would conflict with this position on these issues
may be considered Key Manufacturing Votes. NAM
energy-tax contact: Monica McGuire, mailto:mmcquire@nam.org.
A major battle is brewing
in the Senate, where the Health, Education, Labor and Pensions
Committee is expected to mark up a pension bill pushed by
panel chair Ted Kennedy (D-MA) on 3/20. Sponsors of
other bills, including Sens. Boxer (D-CA) and Corzine (D-NJ),
are unifying behind the Kennedy measure. A business
coalition is lobbying against these bills on a daily
basis. On 2/25, more than 530 associations and companies
sent a joint letter to lawmakers, urging that Congress proceed
with caution before changing U.S. retirement policy. The
NAM is a founding member of the group, the Coalition on
Employee Retirement Benefits.
Some 56 million Americans
enjoy 401(k), profit-sharing and ESOP benefits. Pending
legislation could harm workers’ retirement-security in several
ways:
Limits on holding
periods could discourage companies from matching employee
contributions with company stock.
Percentage caps and
mandatory diversification would limit employee
choice.
Arbitrary restrictions
on transaction-suspension (i.e., lockout) periods could
interfere with plan administration and improvement.
Finally, ERISA already
mandates strict fiduciary standards and stringent
sanctions. Changing that framework would add costs and
further chill efforts to expand pension coverage.
Kennedy’s bill would limit
the amount of stock that employers could contribute to
employees’ retirement plans and would expose company
executives and accounting firms to lawsuits over alleged
violations of pension law. His bill will not include the
NAM-backed investment-advice provisions that passed the
House. Sens. Hutchinson (R-AR) and Gregg (R-NH) sponsor
the Administration’s bill.
The
NAM believes that the Administration bill would be bad for
retirement security and Kennedy’s bill would be worse.
An NAM witness (Gene Little of The Timken Company) testified
on pension issues 3/6 before the House Ways and Means
Oversight Subcommittee, and NAM members met 3/7 with Rep. Sam
Johnson (R-TX). Help us lobby using materials at
http://www.nam.org/secondary.asp?TrackID=&CategoryID=897.
NAM contacts: Dorothy Coleman, dcoleman@nam.org and Neil
Trautwein, ntrautwein@nam.org.
House floor action on
NAM-backed class-action reform bill H.R. 2341 is likely the
week of 3/11. Please take time now to contact your
representative, urging support. The House Judiciary
Committee approved H.R. 2341 by a 16-10 vote on 3/7 with only
minor changes. The panel wisely rejected efforts by
trial lawyers and their allies to weaken the bill.
H.R. 2341 would close
loopholes that allow forum shopping, where trial lawyers in
class-action suits shop for state/local courts that favor
local lawyers over out-of-state companies. The bill
would automatically shift large (more than $2 million),
multi-state class actions from state to federal courts when at
least one plaintiff and one defendant are from different
states.
Contrary to opponents’
claims, the bill, sponsored by Reps. Bob Goodlatte (R-VA) and
Rick Boucher (D-VA), includes key consumer protection
provisions. These include: 1) requiring notices
sent to class members be written in plain English so they can
understand their rights, obligations and benefits; 2)
eliminating discrimination among class members in dispensing
damage awards; and 3) assuring that plaintiffs who win their
suits don’t suffer a net loss due to legal costs, attorneys’
fees; etc. NAM contact: Lawrence Fineran; lfineran@nam.org.
YOU HAVE TWO MORE YEARS TO
MEET "MACT" PERMIT RULES
EPA announced 3/5 that
companies will have two more years to apply for maximum
achievable control technology (MACT) permits that allow them
to meet air toxic standards. The new rule revises the
Clean Air Act’s (CAA) Section 112(j) rule and creates a
two-part air toxics controlpermit application process.
Part 1 applications, due
5/15/02 from all major sources in categories for which EPA
has failed to issue national emissions control standards,
will include basic information, such as source type and
location.
Part 2 applications, due
5/15/04, will require firms to submit the relevant process,
pollutant, andcontrol
information to allow permitting authorities to develop MACT
technology for the facility equivalent to what EPA would
have developed.
The NAM welcomes the final
rule as providing flexibility under the CAA’s air toxics
program. The 5/15/02 deadline threatened confusion in
states and industries, as the EPA lacked resources to complete
its required MACT promulgations. The rule will soon be
published in the Federal Register. NAM
contact: Jeffrey Marks;jmarks@nam.org.
CONCLUDING TRADE PACTS MAY BE DIFFICULT
WITHOUT TPA
U.S. efforts to
negotiate market-opening trade pacts around the world are
advancing on numerous fronts. Free Trade Area of the
Americas negotiations are in full swing, discussions with
African nations over new trade measures have been launched and
WTO multilateral talks are underway. Meanwhile, free
trade accords with Chile and Singapore are reportedly nearing
the final stages.
But the U.S.
could have a difficult time translating this activity into
success unless Congress moves quickly to approve trade
promotion authority (TPA) legislation. TPA is a vital
tool used to secure last-minute concessions that often result
in major new export opportunities for U.S.
manufacturers.
The House approved
NAM-backed TPA bill H.R. 3005 on 12/6. Senate Majority
Leader Tom Daschle (D-SD) says the Senate could debate TPA
this spring. The chief obstacle continues to be funding
of the Trade Adjustment Assistance program. The NAM is
asking senators to forge a bipartisan TAA consensus among
themselves and with the Administration so that action can
advance on TPA. Please contact your senators
today, urging prompt passage of TPA. For sample letters
and talking points, access http://www.nam.org/tpatoolkit.
NAM contact: Scott Otteman; sotteman@nam.org.
ILL-ADVISED STOCK OPTIONS
BILL MAY SEE ACTION SHORTLY
An ill-advised Levin
(D-MI)/McCain (R-AZ) stock-options bill, S. 1940, may come up
as an amendment to unrelated legislation. The bill would
require companies to estimate the value of stock options at
the time of grant and deduct the estimated amount from
financial-statement earnings at that time. The company’s
eventual (at time of exercise) tax deduction would then be
limited to this estimate. S. 1940 would inappropriately
link financial accounting and tax accounting, resulting in a
tax increase on companies that offer broad-based stock-option
plans.
Some Senate offices are
concerned about the perceived negative consequences of voting
against any bill that even sounds like it might head off
another Enron. In reality, the stock options issue and
the problems at Enron are not related. The
NAM-led Stock Options Coalition met 3/6 as part of its ongoing
efforts to head off this bad bill. NAM contact: Kimberly
Pinter, kpinter@nam.org.
AGENCIES FREQUENTLY
IGNORE IMPACT OF REGULATIONS ON SMALL
COMPANIES
Jeff Gibson of NAM-member
American Pacific Corp. told the House Small Business Committee
on 3/6 that EPA and other agencies do not sufficiently adhere
to the Small Business Regulatory Enforcement Fairness Act
(SBREFA). NAM members and staff played a key role in
helping enact the 1996 law aimed at easing the regulatory
burden on small companies (500 employees or less).
“Many small businesses
cannot afford to have staff designated to monitor the EPA web
site or the The Federal Register,” said Gibson.
“Companies are effectively being regulated out of business
without ever having the opportunity to work with agencies to
fashion rules that would give them the opportunity to make a
difference before rules are finalized or even
proposed.”
For example, EPA has not
analyzed the effects of its proposed rule on
hydrochlorofluorocarbon (HCFC) use by small firms, as required
under SBREFA. If it had, “that analysis would confirm
that the unintended effects…are significant, unfair and
needless,” said Gibson. The rule will have no
environmental gain, raise the price of HCFCs and will
establish a new commodity market, Gibson said. To view
the testimony, visit http://www.nam.org/secondary.asp?TrackID=&CategoryID=249,
click on “SBREFA Compliance. NAM contact: Jeff Noah, jnoah@nam.org.
The NAM offers members
across the U.S. opportunities to become involved, make their
voices heard and help boost their bottom lines. Consider
the following upcoming events—
March
18-21:National
Manufacturing Week 2002 – Don’t Miss Out! Be sure the right people
from your company attend NMW ’02 on 3/18-21, McCormick Place,
Chicago, IL. See Dean Kamen, inventor/visionary of the
Segway Human Transporter (HT); NASA technology-transfer
solutions; Lean Manufacturing Simulation: by Chicago
Manufacturing Center; and “Coming Out Ahead: Uncertainty
Breeds Success,” from Deloitte & Touche.
Registration is free. Go to
http://www.manufacturingweek.com/
or call Reed Exhibitions at (800) 840-0678 to sign
up.
April
14-16:NAM Public
Affairs Conference. Ponta Vedra, FL.
Contact Gabraelle Lane, (202) 637-3114.
April
25-26:“How To Limit Your Product Liability Exposure.” The
Westin Resort, Hilton Head Island, SC. Call Norma Leake, (202)
637-3192.
GetTech, the career
education initiative of the Center for Workforce Success, the
NAM and the Commerce Dept., has just opened its new, improved
Web site. It encourages middle school youngsters to take
math, science and technology courses seriously so they can be
prepared for a technology-driven future. The new site,
developed with funds from the Labor Dept., offers many new
interactive games, links, activities and resources for kids,
teachers, school counselors and parents to inform them about
careers involving technology, and to motivate youngsters to
pursue opportunities in manufacturing. Check it out at
http://www.gettech.org/.
The Center for Workforce
Success is the workforce-development wing of The Manufacturing
Institute, the educational and research arm of the NAM.
Go to http://www.nam.org/institute
for more information on its activities. CWS contact:
Phyllis Eisen, peisen@nam.org.
HOW DOES YOUR
COMPANY'S COMPENSATION PACKAGE STACK
UP?
The NAM has just
released the second edition of Executive Compensation 2001:
The National Executive and Senior Management Compensation
Survey, containing annual salary and compensation averages
for 33 top executive positions, as reported from 4,500
companies in 35 states.
This complete
reference guide, packed with the latest data in quick-read
tables, will help you develop and maintain a cost-effective
compensation awards and benefits program.
NAM members get a
one-time discount of 35 percent; a savings of $130! For a
limited time, Executive Compensation 2001: The National
Executive and Senior Management Compensation Survey is
available to members for $365 (non-members $495) when you
order online at http://www.nam.org/bookstore
or by calling (1-800) 637-3005.
The Commerce Dept. report
on 3/6, indicating that new orders for manufactured goods rose
1.6 percent in January, is the third recent statistic
indicating that a recovery in manufacturing may be in the
works.
The
indicator had risen 0.7 percent in January. Shipments of
both durable and non-durable goods accelerated in
January. Inventories continue to be worked off, as well,
in most sectors. Read our news release with more details
at http://www.nam.org/tertiary.asp?TrackID=&CategoryID=746&DocumentID=24421
Sen. Fred Thompson
(R-TN) will not seek re-election.
Heeding NAM/industry
concerns, the FTC and the Justice Dept.’s Antitrust Division
3/5 reached an agreement on “clearance” procedures that
should speed up merger reviews and clarify which agency
takes primary jurisdiction over specific industries.
Access http://www.ftc.gov/opa/2002/03/clearance.htm.
The Supreme Court 3/4
upheld rules intended to give people choices for electricity
service.
The redrawn Maryland
8th district that is expected to clear the state
legislature will be 5 percent more Democratic, says Sec. of
State John Willis (D). State Sen. Chris Van Hollen and
state Rep. Mark Shriver are the leading Democratic
candidates hoping to unseat vulnerable incumbent Rep. Connie
Morella (R).
Reps. Sonny Callahan
(R-AL) and Robert Borski (D-PA) both announced 3/4 their
retirements. Redistricting was a major factor in
Borski’s decision.
Senate Majority Leader
Tom Daschle (D-SD) 3/5 threatened all-night sessions to
overcome any filibuster by opponents of campaign finance
legislation.
Mitt Romney has
commissioned a poll of Massachusetts voters to help him make
a decision as to whether to challenge Acting Governor Jane
Swift in the GOP primary.
Gov. Bill Janklow (SD)
will run for the state’s only House seat, a move that will
pit him against former Sen. Larry Pressler in the 6/4 GOP
primary.
Briefing is written
by the Member Communications Department of the National
Association of Manufacturers.It is distributed by
e-mail and posted to the NAM Web site (http://www.nam.org/) weekly
when Congress is in session.
The
e-mail address for the NAM staff member who is the main
contact on each issue appears at the end of each
corresponding article.
All
NAM staff can also be reached at (202)
637-3000.
Comments on this publication can be forwarded
to dkurkul@nam.org.
.gif){kind=tracking}
