AED Washington Insights Newsletter
April 2012
Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team
In this Issue:
The Equipment Industry is Coming to Washington - Are You?
AED's 2012 Washington Fly-In is just around the corner. On April 25-26, equipment distributors will come to the Capitol to make their voices heard. Will you be among them?
AED's Fly-In is the equipment industry's premier public policy event. It provides a unique opportunity for equipment distributors, manufacturers, and industry service providers to come to Capitol Hill, hear directly from lawmakers and industry allies about issues that impact equipment markets, and participate personally in the lobbying process.
Here's who's on the Fly-In agenda:
- Sen. Barbara Boxer (D-Cal.), Chairman, Senate Environment & Public Works Committee;
- Sen. Jim Inhofe (R-Ill.), Ranking Member, Senate Environment & Public Works Committee;
- Rep. Cory Gardner (R-Col.), Member, House Energy & Commerce Committee;
- Rep. Richard Hanna (R-N.Y.), Member, House Transportation & Infrastructure; Small Business; and Education & Workforce Committees;
- Rep. Randy Hultgren (R-Ill.), Member, House Transportation & Infrastructure; Agriculture; and Science, Space & Technology Committees;
- Rep. Doug Lamborn (R-Colo.), Chairman, House Energy & Mineral Resources Subcommittee;
- Rep. Reid Ribble (R-Wis.), Member, House Transportation & Infrastructure; Budget; and Agriculture Committees;
- Rep. Peter Roskam (R-Ill.) Member, House Ways & Means Committee & Chief Deputy Republican Whip;
- Rep. Steve Stivers (R-Ohio), Member, House Financial Services Committee;
- Rep. Lee Terry (R-Neb.), Member, House Energy & Commerce Committee;
- Rep. Steve Womack (R-Ark.), Member, House Appropriations Committee;
- Mark A. Bloomfield, President and Chief Executive Officer, American Council for Capital Formation;
- Bernadette Budde, Senior Vice President, Business Industry Political Action Committee (BIPAC);
- Ron Eidshaug, Vice President of Congressional and Public Affairs, U.S. Chamber of Commerce;
- Caroline Harris, Chief Tax Counsel and Executive Director of Tax Policy, U.S. Chamber of Commerce; and,
- Kyle Isakower, Vice President of Regulatory and Economic Policy, American Petroleum Institute;
- Christopher Myers, Manager, U.S. Government Affairs, Caterpillar, Inc.
Day one of the Fly-In begins with a breakfast briefing on AED's legislative priorities, followed by an energy policy roundtable to discuss the opportunities and challenges associated with shale energy and the Keystone XL pipeline. After a luncheon and analysis of the 2012 election by one of Washington's premier pundits, attendees will hear from leading lawmakers and tax policy experts about the upcoming comprehensive tax reform debate. The day's formal events will conclude with a briefing on infrastructure policy from Sen. Barbara Boxer (D-Cal.) and Sen. Jim Inhofe (R-Okla.) at which Boxer and Inhofe will receive AED's 2012 Legislative Leadership Award. Following the presentation, there will be an evening reception for equipment industry leaders and our Washington allies.
Day two opens with an AED PAC breakfast featuring six House members (see related article in this month's Insights). Attendees will then spend the duration of the day meeting with lawmakers and staff to urge action on the equipment industry's legislative agenda. In between meetings, attendees will be able to return to AED's "War Room," where they can share intelligence, ask questions, resupply materials, and enjoy a buffet lunch. The Fly-In concludes with a congressional reception in the House Transportation & Infrastructure Committee Hearing Room.
"With no clear plan forward for the future of highway and water infrastructure programs, massive uncertainty surrounding the tax code, and an unprecedented budget crisis, there's never been a more important time for equipment distributors to be involved in the legislative process," AED Vice President of Government Affairs Christian Klein said. "Our members need to engage with their elected representatives to let them know what's in the best interests of our industry and the long-term health of the U.S. economy."
To learn more about the Fly-In, view the current agenda, or register, go to: http://www.aednet.org/fly-in/.
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Conference Call: House Passes Second Highway Extension in Less than a Month to Set up Negotiations with Senate
After spending months pondering how to move forward on a surface transportation reauthorization bill, on April 18, the House finally passed legislation to set up conference negotiations with the Senate.
The bill (H.R. 4348), which passed with bipartisan support, extends surface transportation programs through Sept. 30. It also grants approval of the Keystone XL pipeline project. The new legislation follows the enactment of another short-term extension at the end of March authorizing surface transportation programs through June 30.
While abandoning the five-year bill envisioned in the House's original highway measure (H.R. 7) due to lack of support from within the Republican conference, the move will use the extension as a shell to force a conference committee with the Senate to negotiate a final bill. In addition to Keystone, House leaders attached the RESTORE Act (H.R. 3096), which releases the monies collected from fines issued after the BP Deepwater Horizon oil spill to the Gulf Coast states.
On the House floor, three amendments were adopted by the chamber, including a modified version of the RAMP Act (H.R. 104) to tie the Harbor Maintenance Trust Fund to annual revenue, a provision to prevent the Environmental Protection Agency from regulating fly ash as a hazardous material, and language from H.R. 7 that would speed environmental considerations for surface transportation projects.
Following House passage of H.R. 4348, AED President & CEO said, "The uncertainty surrounding federal surface transportation programs has hurt construction contractors and suppliers and forced us to delay transportation improvements vital to the long-term health of the U.S. economy. AED is pleased that the House has finally passed legislation to move the highway and transit reauthorization process forward.
"AED would prefer a multi-year bill that creates new user fees to ensure the Highway Trust Fund's long-term integrity and which increases investment to the levels necessary to improve the nation's transportation system. However, at this point in time, we believe a swift conference on H.R. 4348 and MAP-21, the Senate's two-year highway bill, is the best way to keep the reauthorization process moving forward and restore some near-term certainty to federal infrastructure programs."
Equipment distributors must keep the pressure on their representatives to approve a new highway bill. Dealers are encouraged to visit AEDaction.org to remind lawmakers of the critical need for the certainty a multiyear bill will bring to construction and equipment markets. Also, be sure to attend the 2012 AED Washington Fly-In to make your personal plea for a highway bill to restore certainty to construction markets.
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AED PAC: An Opportunity for Interaction
AED's government affairs team has made no secret that a strong political program is a key element of AED's 2012 strategy. AED PAC helps
equipment distributors who have provided the association with prior solicitation consent to connect with lawmakers who share our policy goals.
The AED PAC Congressional breakfast at this year's Fly-In is a prime example. Attendees will have the opportunity to enjoy breakfast with six freshman members of Congress who have quickly made their mark on Capitol Hill, played leadership roles on issues important to the industry, and have built strong relationships with members of the association.
AED PAC provides several other ways for equipment industry leaders to engage in the political process. For example, AED's ImPACt 2012 program, also gives distributors a chance for direct engagement by placing individual distributors front and center delivering AED PAC checks. On April 11, members of the Illinois Equipment Distributors group honored Rep. Peter Roskam (R-Ill.) with a contribution to his reelection campaign for his commitment to strong federal infrastructure programs, the free market, and entrepreneurship.
To join the industry leaders already taking advantage of the opportunities AED PAC affords, click here to provide solicitation consent. Federal election laws require that AED members give solicitation consent before AED PAC can provide more details about its activities. Only executives and owners of AED dealer member companies that have given solicitation consent may contribute to AED PAC.
Provide AED PAC solicitation consent today so you can join your fellow industry leaders! If you have questions about AED PAC, please contact AED Communications Manager Josh Pudnos at 703 739 9513.
2012 AED PAC Contributors
President's Circle ($5,000)
Mark Romer, James River Equipment
Jim & Donna Stephenson, Yancey Bros. Co.
Chairman's Caucus ($2,500)
Dennis Heller, Stephenson Equipment
Robert Henderson, Associated Equipment Distributors
Dale A. Leppo, Leppo Rents/Bobcat of Akron
Jay Paradis, BRAMCO
Wes Stowers, Stowers Machinery Corporation
Capitol Club ($1,000)
Bruce Bowman, Star Equipment, Ltd.
Michael Brennan, BRAMCO
Gary Bridwell, Ditch Witch of Oklahoma
David Fackler, Asphalt Care Equipment, Inc.
Chris Gaylor, Power Equipment Co.
Christian A. Klein, Associated Equipment Distributors/OFMK
Dennis Kruepke, McCann Industries, Inc.
Timothy Watters, Hoffman Equipment Co.
Washington Team ($500)
Everett Monroe, Bee Equipment Sales, Ltd.
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Depreciation Bonus Extension Introduced in Senate
Sen. Debbie Stabenow (D-Mich.) introduced a bipartisan bill that would reinstate the 100 percent depreciation bonus through 2012 (S. 2240).
S. 2240 is a companion measure to legislation introduced in the House by Rep. Patrick Tiberi (R-Ohio) (H.R. 4196). Tiberi's bill has seen a steady swell of bipartisan support and now enjoys 34 co-sponsors.
In addition to the extended opportunity for businesses to take advantage of the 100 percent depreciation bonus, the legislation offers other benefits including:
- Removing restrictions to allow more corporate Alternative Minimum Tax credits for capital reinvestment that would otherwise qualify for the depreciation bonus; and,
- Allowing companies that use the "percentage of completion" accounting method to take advantage of the depreciation bonus.
While there is a growing base of bipartisan support on Capitol Hill for reinstating 100 percent bonus depreciation, it is critical that you add your voice to those supporting this important investment incentive. Visit AEDAction.org to urge your lawmakers to co-sponsor this legislation.
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Thune Introduces Bill to Permanently Repeal Estate Tax
Sen. John Thune (R-S.D.) recently introduced legislation (S. 2242) to permanently repeal the federal estate tax to protect American family businesses. The Death Tax Repeal Permanency Act, which has 35 co-sponsors, mirrors the bi-partisan House bill (H.R. 1259) that has 205 co-sponsors.
In addition to permanently repealing the estate tax, both the Senate and House bills include provisions to:
- Repeal the generation skipping transfer (GST) taxes;
- Permanently set the gift tax exemption at $5 million; and,
- Protect families from high capital gains taxes on inherited estates.
In 2012, the tax is at a 35 percent rate with a $5 million exemption. However, without action, the estate tax will jump to pre-2001 levels (55 percent rate and $1 million exemption) in 2013. Congress should resolve the uncertainty surrounding the estate tax (preferably through permanent repeal) so that family businesses do not continue to incur massive estate planning and insurance costs as the tax fluctuates from year to year.
AED supports efforts like Sen. Thune's legislation to bring long-term solutions to the estate tax and foster small business growth. Be sure to encourage your lawmakers to co-sponsor this important bill using AEDAction.org.
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Lawmakers Exploring Innovative Financing Approaches for Water Infrastructure
With mounting budget deficits and the Clean Water and Drinking Water State Revolving Fund programs facing more cuts, lawmakers are looking to alternative means to finance water infrastructure projects.
Rep. Bob Gibbs (R-Ohio), chairman of the Transportation & Infrastructure Committee's Water Resources & Environment Subcommittee recently held two hearings on innovative financing approaches for community water infrastructure projects. The focus of the hearings was on draft water infrastructure legislation that Gibbs is expected to introduce in the near future.
The draft bill, known as the Water Infrastructure Financing & Innovation Act (WIFIA), would provide federal credit assistance in the form of direct loans and loan guarantees to finance significant water and wastewater infrastructure projects. WIFIA credit assistance could provide improved access to capital markets, flexible repayment terms, and potentially more favorable interest rates. The WIFIA concept is modeled after a similar, highly successful program used to leverage private sector funding for surface transportation projects (TIFIA).
Additionally, the draft legislation is expected to include a provision to lift the state volume cap on private activity bonds for water and wastewater infrastructure projects, a top AED priority. Estimates are that doing so could bring in $5 billion annually in private investment. A similar provision was included in the Senate-passed highway bill (MAP-21).
Water infrastructure investment is a win-win for everyone, including the government. Financing from the private sector is an even better situation. According to a recent study commissioned by AED by researchers at the College of William and Mary's Thomas Jefferson Program in Public Policy, investing $1.00 in sewer systems and water infrastructure generates $2.03 in tax receipts ($1.35 for the federal government) over 20 years.
To urge lawmakers to make water infrastructure investment at top priority visit www.AEDAction.org.
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AED President Talks Energy, Workforce with Canada Prime Minister
AED President & CEO Toby Mack met April 2 in Washington, D.C. with Canadian Prime Minister Stephen Harper, Canada's ambassador to the United States Gary Doer, Trade Minister Ed Fast, and the PM's Chief of Staff Nigel Wright to discuss energy policy and other cross-border issues. Mack is a member of the Board of Directors of the Canadian-American Business Council (CABC), which coordinated the meeting. Other CABC Board members also participated.
In addition to providing background about equipment industry, Mack briefed the PM about undue hassles AED members have experienced at border crossings. Distributors in the United States and Canada have reported problems moving personnel, including trainers and training materials, back and forth between U.S. and Canadian facilities, and have encountered high administrative hurdles when trying to hire technicians from one country to work in the other.
The group also discussed the Keystone XL pipeline project. Canadian participants said that the slow approval process has unfortunately taught Canadian leaders that they, too, must have an "all of the above" energy policy, especially with respect to export markets.
Mack's meeting is a reflection of AED's heightened activism north of the border. Since 2010, AED has increased its focus on Canadian public policy issues, particularly infrastructure, energy, and workforce issues with cross-border impact. In addition to the CABC, AED is also a member of the Canadian Chamber of Commerce (CCC) and participates in the CCC's transportation and infrastructure committee.
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NLRB Posting Requirement Faces Uncertain Future
A federal court has blocked a National Labor Relations Board (NLRB) mandate that would require most employers to post workplace notices informing employees of their collective bargaining rights under the National Labor Relations Act (NLRA).
On April 17, the U.S. Court of Appeals for the District of Columbia Circuit granted an emergency injunction prohibiting the rule from going into effect on April 30, as was previously scheduled.
The injunction comes after a March 2 ruling from a lower court holding that the NLRB was within its rights to implement the law. Following the ruling, the Coalition for a Democratic Workforce, of which AED is a member, joined with others in the business community seeking the injunction while the case is appealed.
The D.C. Circuit's decision means that the rule will no longer take effect on April 30. Oral arguments on the appeal are scheduled for September. Depending on the outcome, the earliest the rule could enter force would be in the fall.
South Carolina District Court rejects posting mandate
The injunction follows an April 14 ruling from another federal court, the U.S. District Court for South Carolina, which held that the NLRB does not possess the authority to mandate the posting. The South Carolina court's holding stated that Congress did not intend to grant the Board the authority to proactively regulate employers.
The NLRB has indicated that it will appeal the South Carolina judgment.
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White House Issues Executive Order Targeting Natural Gas Resources
On April 13, President Obama signed an executive order creating the Interagency Working Group to Support Safe and Responsible Development of Unconventional Domestic Natural Gas Resources.
While noting that the states are the primary regulators of onshore oil and gas activities, the order specified that the federal government has an important role in regulating gas activities on public lands and encouraging greater use of natural gas in transportation, supporting research and development aimed at improving the safety of natural gas development and transportation activities, and setting public health and environmental standards.
The order aims to harmonize the efforts of at least 13 federal agencies currently examining various aspects of domestic natural gas production. The group's functions are to include coordinating agency policy activities, promote the sharing of information, and facilitate long-term planning.
In creating the working group, however, the order does not create any right or benefit enforceable under U.S. law.
Response to the executive order from industry has generally been cautiously positive.
"We're pleased that the White House recognizes the need to coordinate the efforts of the ten federal agencies that are reviewing, studying or proposing new regulations on natural gas development and hydraulic fracturing," said Jack Gerard, American Petroleum Institute president and CEO, after attending a White House meeting on the executive order.
"We have called on the White House to rein in these uncoordinated activities to avoid unnecessary and overlapping federal regulatory efforts and are pleased to see forward progress."
Gerard also cautioned that we need to look first to the states as the historic regulators of natural gas before applying additional layers of federal regulation from Washington.
"There are already strong state regulatory systems in place," Gerard said. "Adding potentially redundant federal regulation could stifle the kind of investment that has led to lower energy prices for consumers, more American jobs, and increased energy security."
Gerard added that the natural gas boom, as well as the oil development in North Dakota and other tight oil areas, would not be possible without hydraulic fracturing technology.
Recognizing the direct impact on our members and broader benefits to the U.S. economy, AED has made shale energy a top priority in recent months. We are coordinating closely with API and other organizations and positioning the association to be a leading voice in the shale energy debate at both the state and federal levels.
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