November 2008: Government Affairs

Words: Dan KamysNovember 2008

Legislative Updates

The 110th Congress (2007-2008) has been one of the least productive, in terms of actually passing meaningful legislation, in recent history. Two issues important to the masonry industry, school construction and 3% withholding tax, were dealt with in the House, but died a slow death in the Senate. Following are legislative updates.

3% Withholding Tax: Ways and Means Committee Chairman, Charlie Rangel (D-NY), included language that would delay the implementation of the 3% tax withholding requirement by one year (2012). This legislation passed the House, and then died in the Senate. Three other pieces of legislation have been introduced to address the 3% tax and "tax gap" dilemma. The lead legislation introduced by Congressmen Kendrick Meek (D-FL) and Wally Herger (R-CA) has 259 co-sponsors. This legislation has stalled in the House. In the Senate, Norm Coleman (R-MN) and Susan Collins (R-ME) have introduced legislation to provide for a national, Internet-accessible filing system for Federal tax liens to address the "tax gap" problem that the 3% tax was supposed to address.

Alternative Minimum Tax (AMT): The AMT was "patched" in 2007. It will be difficult to ever completely repeal the AMT, due to the amount of tax revenue it produces. Congress recently passed the AMT patch as part of the Emergency Economic Stabilization Act of 2008. Central to the tax cut package is a provision that will extend tax relief to some 20 million middle-class Americans who would be inadvertently hit with the AMT. Originally intended to be levied only on the wealthiest Americans, the AMT was never adjusted for inflation and would hit more than 20 million middle-class taxpayers if Congress did not act.

Immigration Reform: Immigration reform has been a major issue during the 110th Congress. In March of this year, Republican senators introduced many enforcement-oriented immigration bills in an effort to try to revive the immigration debate. These bills contained ideas including improvement of workplace screening procedures, identifying English as a national language, and streamlining the deportation process for illegal immigrants convicted of violent crimes. However, both parties' national conventions "ducked" the immigration issue and weren't overtly pressed by such groups as Numbers USA to make this a priority issue. You are likely to see a comprehensive immigration plan seriously discussed in the next Congress with an Obama or McCain administration.

School Construction: Congressman Charlie Rangel (D-NY), together with Congressman Jim Ramstad (R-MN) and Congressman Bob Ethridge (D-NC), introduced bi-partisan legislation titled, America's Better Classroom Act of 2007. The bill would provide approximately $25 billion in interest-free bonds for school construction and renovation. Also, the 21st Century Green High-Performing Public Schools Act, introduced by Congressman Ben Chandler (D-KY), passed the House in June and stalled in the Senate. Chandler's legislation approves $6.4 billion a year for school construction. In total, the bill increases spending for school construction by $20.3 billion.

E-Verify: President Bush recently issued an executive order requiring all federal contractors to use the E-Verify employment verification system once they enter into a contract with an executive department or agency. The rule to implement the order was proposed in June with a 60-day comment period. After the comment period closed, the government began to consider comments received and will address them in a final rule. The rule will not apply to existing federal contracts, but only to new solicitations and contracts awarded after the effective date of the final rule. However, contracting officers may be required to amend current contracts, depending on their terms. The final rule will probably be released before the end of the Bush presidency.

It will be important for you to be actively involved in the legislative process by promoting issues important to the masonry industry with your member of Congress and Senators. All of the legislation filed in the 110th Congress will have to be re-filed and start at the beginning of the legislative process when the new Congress begins in January.


   
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