On Monday September 27 the President signed into law a long stalled small business incentive program. The National Concrete Masonry Association, independently and also in conjunction with other concrete industry partners, was instrumental in getting favorable elements into the final version of this small business bill. In the next Congress NCMA will continue to be vigilant and aggressive in the pursuit of other small business initiatives that add value for NCMA members.

The bill contains $12 billion in tax breaks and adds enhancements to existing government small-business programs. It also establishes a $30 billion lending fund for small businesses. It will also give $1.5 billion in grants to support $15 billion in new small business lending through already successful state programs, and reduce the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years.

Specifically, the bill includes

A revival of an expired bonus depreciation provision to allow companies to write off 50 percent of the cost of new equipment more quickly.
Increases Section 179 expensing – permitting up to $500,000 in capital investments that businesses can expense.
Establishment of a $30 billion small-business lending fund administered by the Treasury Department, with funds directed to community banks. This provision will be offset with increased penalties for businesses for failing to file information returns, new limits on paper-makers' ability to claim a biofuels tax credit and new rules on tax-delinquent federal contractors.
Gives $1.5 billion in grants to support $15 billion in new small business lending through already successful state programs.
Reduces the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years. Small businesses will also be able to count the general business credits against the Alternative Minimum Tax (AMT), freeing up capital for expansion and job growth.
Increases to $10,000 the tax deduction for start-up expenditures – doubling the current levels.
Creates new tools to help small businesses export goods, which will leverage more than $1 billion in exports.
Establishes a new State Export Promotion Grant Program (STEP), which would increase the number of small businesses that export goods to other countries.
Amends a provision in the 2010 health care law to require rental property owners to file 1099 tax forms for payments of certain expenses associated with their rental real estate.
Eliminates a requirement in current law that employees pay taxes on the value of certain transmissions they send on employer-provided cell phones.

September 20, 2010

Logjam Broken on Small Business Lending & Tax Bill As Senate To Pass This Week

Senate Democrats won a victory on September 14 when the chamber voted to invoke cloture on the substitute amendment to a small-business lending bill, clearing the path for the bill's final passage this week after months of delays. The bill, which failed to move several times prior to the August recess, contains $12 billion in tax breaks and enhancements to existing government small-business programs which has support from both Democrats and Republicans. It would also establish a $30 billion lending fund for small businesses. It also would give $1.5 billion in grants to support $15 billion in new small business lending through already successful state programs, and reduce the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years.

The bill was able to move ahead after Sen. George Voinovich (R-OH) announced that he would support the bill if Senate leaders allowed votes on amendments that would repeal a controversial section of the healthcare overhaul law that requires businesses to file a 1099 form to every business or individual from which it purchases more than $600 in goods or services. Both amendments failed prior to the cloture vote (See story below). His yes vote, along with that of Sen. George LeMieux (R-FL), allowed the cloture motion to pass by a vote of 61-37 and sets up final passage by the Senate later this week. The House will have to concur in the measure to send it to the White House. Before the August recess, House Majority Leader Steny Hoyer (D-MD) said the House would take up the bill after the Senate completed work on it, but some differences remain in how the House wants to pay for the bill.

About H.R. 5297 – The Small Business Jobs Act of 2010

The bill which was passed by the Senate on 61-38 on September 16 includes a number of items that are intended to help small businesses across the nation. According to Senate leaders, the revised bill will give small businesses $12 billion in tax cuts, helps small businesses create 500,000 new jobs, incentivizes and increases small business lending, and helps small business owners access private capital to finance an expansion and hire new workers.

Specifically, the bill includes:

A revival of an expired bonus depreciation provision to allow companies to write off 50 percent of the cost of new equipment more quickly.
Increases Section 179 expensing – permitting up to $500,000 in capital investments that businesses can expense.
Establishment of a $30 billion small-business lending fund administered by the Treasury Department, with funds directed to community banks. This provision would be offset with increased penalties for businesses for failing to file information returns, new limits on paper-makers' ability to claim a biofuels tax credit and new rules on tax-delinquent federal contractors.
Gives $1.5 billion in grants to support $15 billion in new small business lending through already successful state programs.
Reduces the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years. Small businesses will also be able to count the general business credits against the Alternative Minimum Tax (AMT), freeing up capital for expansion and job growth.
Increases to $10,000 the tax deduction for start-up expenditures – doubling the current levels.
Creates new tools to help small businesses export goods, which will leverage more than $1 billion in exports.
Establishes a new State Export Promotion Grant Program (STEP), which would increase the number of small businesses that export goods to other countries.
Amends a provision in the 2010 health care law to require rental property owners to file 1099 tax forms for payments of certain expenses associated with their rental real estate.
Eliminates a requirement in current law that employees pay taxes on the value of certain transmissions they send on employer-provided cell phones, and;
A tax compliance provision which would amend a contentious provision in the new Patient Protection and Affordable Care Act to require rental property owners to file 1099 tax forms for payments of certain expenses associated with their rental real estate.

The amended bill now goes back to the House of Representatives where it must be passed prior to being sent to President Obama for his signature.

August 18, 2010

EPA Announces Notice of 60-day extension to public comment period on CCR Proposal

The Environmental Protection Agency announced today that they will grant a 60-day extension to the public comment period on the proposed rulemaking for the identification and listing of special wastes, specifically of interest to NCMA is the disposal of coal combustion residuals from electric utilities. In recent weeks many industry organizations, including NCMA, formally requested an extension of the comment period to provide more time for our industry to assess and properly articulate the potential impact of the ruling on the projected future beneficial use of these byproducts encapsulated in concrete products. To view the notice, click here.

August 17, 2010

Employee Free Choice Act, HR 1409 /S. 560 (Card Check)

Although the Employee Free Choice Act (EFCA) is the centerpiece of organized labor’s legislative agenda, it remains in legislative limbo as Senate leaders cannot find the necessary 60 votes to overcome a Republican-led filibuster threat. Among other provisions, EFCA would require an employer to recognize the union without an representation election if 50 per cent of the employees in the bargaining unit signed cards favoring the union. Several moderate Democratic Senators including Sens. Mary Landrieu (LA), Blanche Lincoln (AR), and Mark Pryor (AR) have never supported the bill and no moderate Republicans have stepped forward to provide additional votes. Over the past year there have been sporadic attempts to amend the bill to make it acceptable to a handful of Republicans and/or moderate Democrats. The most notable compromise offered is elimination of the card check provision in return for shorter representation election campaigns, greater union access to employees when employers utilize “captive audience” presentations against the union and mandatory mediation of first contracts after union recognition. Thus far, these efforts at compromise have not resulted in any new votes that would ensure passage.

Nevertheless, the bill’s chief sponsor, Senator Tom Harkin (D-IA), chairman of the Health, Education, Labor and Pensions Committee (HELP) continues to say that passage is possible. With very few legislative days remaining before the election, the only opportunity for Harkin and organized labor to pass the bill would be in the lame duck session scheduled for November and December. Realistically, however, if the November elections turn out as dismally for the Democrats as currently predicted, there will be little interest to cast such an unpopular vote among many of the 22 Democratic Senators (plus two Independents who caucus with the Democrats) who will be up for re-election in 2012.

Background

The labor movement is disappointed with the Obama Administration and the Democratic controlled Congress. Labor believes that the President and the Democratic leadership of Congress have allowed its agenda to languish for the 18 months of the Obama Presidency. Organized labor viewed Obama as the first President in several generations who is genuinely sympathetic to cause of labor. Coupled with strong majorities for the Democrats in both the House and Senate, organized labor thought it would have a green light to move its legislative agenda. However, after an impressive start with the enactment of Lilly Ledbetter Fair Pay Act (PFA), the other top items on the agenda have been delayed, threatened with filibuster or rejected by Congress. Labor’s agenda has faced virtually uniform opposition from House and Senate Republicans. Moreover, many moderate Democrats from the South and marginal Congressional districts have been reluctant to support labor’s agenda. In fact, even the Ledbetter Act, was watered down by the Senate when it stripped the Paycheck Fairness Act from the House-passed version and passed a more narrow bill.

Moderate Democrats up for re-reelection in 2010 are fearful that pro-labor votes will cost them re-election. The political liability associated with voting for labor’s agenda is demonstrated by the fact that in early 2009, House Speaker Nancy Pelosi announced that she will not bring the Employee Free Choice Act to the floor for a vote unless the Senate passes it first, even though the House passed it in the previous Congress. She took that action to protect House Democrats from marginal Congressional districts from casting this difficult vote.

Finally, after factoring out holidays and scheduled Congressional recesses, there are fewer than 18 legislative days remaining until Congress adjourns for the election. The Senate leadership is not going jeopardize passing legislation aimed creating jobs and other priority issues by bringing up labor legislation that will be filibustered and will have virtually no chance of passage.

The only chance for the labor agenda will come after the November election in the “lame duck” session of Congress prior to the convening of the 112^th Congress in January, 2011. The Congressional leadership is already considering action on contentious issues during the post-election session, including climate change legislation and immigration reform. The Employee Free Choice Act, labor’s top agenda item, and other items on its agenda could be considered during the lame duck session. As noted above, the chances that this strategy would succeed are slim, but not impossible.

With almost all political analysts predicting major losses for the Congressional Democrats in Novembers and many predicting that the Republicans will regain control of one or both chambers, the labor movement is angry and disappointed that it may have missed the best opportunity in 40 years to move its agenda forward. Labor’s anger was demonstrated when it unsuccessfully sought to defeat Sen. Blanche Lincoln (D-AR) in the recent Democratic primary as well as attempts in other states to develop a labor-friendly Democratic coalition to challenge other incumbent moderate Democrats. Sen. Lincoln was key player in the successful effort to block consideration of the Employee Free Choice Act (EFCA) in the Senate. Her refusal to vote for cloture to confirm two Democratic nominees for the National Labor Relations Board (NLRB) was the last straw for the unions. The vote would have come at relatively little political cost to her and would have given the President and the unions a much desired victory. Unions spent $10 million in their attempt to defeat Sen. Lincoln but she was still able to win a runoff primary election, although she is considered the underdog against her Republican opponent in November. This effort earned an anonymous rebuke from a White House staff member who said that the money was wasted when it could have been better used in the November general elections.

June 4, 2010

Smaller, Cheaper Tax Extenders Bill Stalls Prior to Memorial Day Recess

Time ran out on Senate leaders as they were unable to reach an agreement on a tax extenders package prior to the week-long Memorial Day recess setting up a renewed debate for the month of June. Reacting to concerns from moderates, Senate leaders made a number of cuts to the $200 billion proposal and trimming nearly $90 billion from it, but could not get the bill to a vote prior to the recess. The various unemployment and COBRA health insurance benefits that have been extended on a temporary basis will likely expire before Congress can act. Although Congress may eventually extend most of the expiring provisions retroactively, it is likely to take several weeks to do so — with a loss of jobless benefits for some individuals and disruptions to a number of agencies and programs in the meantime. The bill now comes in at a price of around $113 billion which was achieved by shortening the extension of jobless benefits to November 30 instead of the end of the year, revising a provision blocking scheduled cuts in Medicare payments to doctors for just one year instead of three, and jettisoning entirely the earlier version’s extensions of Medicaid assistance to the states and health insurance subsidies for jobless workers under COBRA tax extenders bill. The Senate will likely act on the bill after it returns on June 7 and then that bill must be reconciled with a House measure that passed last December. The House also passed another sprawling package of tax and spending extensions on May 28 but that effort will likely not change the Senate’s plan ahead. Click here for an updated summary of the bill as amended, here for a Joint Committee on Taxation revenue table and here for a technical explanation of the bill. The original text of the bill and amendments can be found on the House Ways and Means website.

May 27, 2010

Life-Cycle Study Provision Added to New Defense Authorization Bill

The House Armed Services Committee approved this week a sweeping defense authorization bill for the Fiscal Year beginning on September 30, 2010 which included in the bill report a provision directing an independent assessment of construction techniques that provide life cycle cost effective facilities used by the Department of Defense. The study would be conducted by the Defense Science Board, a committee of civilian experts appointed to advise the Secretary of Defense on technical matters. The bill language was added in the wake of a recently released report (http://www.gao.gov/products/GAO-10-436) from the Government Accountability Office that identified a lack of sufficient data to conclusively support or deny claims by Navy and Air Force officials and the masonry industry that the Army’s conversion over the past five years to an increased use of wood and modular construction over more durable materials would result in facilities with shorter service lives and higher life-cycle costs. The bill must now go to the full House of Representatives for a vote later this summer.

NCMA has found considerable support in its arguments that durable military construction is in the best interests of the Department of Defense, the tax payers, and the personnel serving the in the armed forces. Much of that support has come from elected representatives who have observed first-hand the impact of construction changes on the bases in their districts. Leadership in addressing this issue on Capitol Hill has also come from the Mason Contractors Association of America (MCAA) and the Masonry First Coalition consisting of regional masonry associations in the Washington State area.

The April 2010 GAO report titled “Defense Infrastructure: DOD Needs to Determine and Use the Most Economical Building Materials and Methods When Acquiring New Permanent Facilities” was critical of the Army’s inability to achieve some of its stated goals in reducing construction costs as well as its lack of follow-through in documenting its progress towards those goals. The report highlights the importance of life-cycle cost considerations in directing defense construction investments, but was not able to identify information needed to make more definitive recommendations without further study.

Commenting on this development, NCMA President Robert Thomas said, “While we were certainly expecting a deeper analysis on the life-cycle issue than was provided by this recent GAO report, we are pleased that the House Armed Services Committee appears to share our concern that there simply is not sufficient justification for the Department of Defense to convert from its long history of using durable materials for the purpose of accomplishing short-term objectives.”