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May Government Relations Update

NRCA's 1999 legislative agenda has gotten off to a fast start. The House of Representatives recently passed three pieces of legislation that should prove to be helpful to contractors.

Two of the bills concern federal paperwork requirements imposed on small businesses. The first - Electronic Filing for Small Businesses (HR 439) - would require federal agencies to enable small businesses to access and submit federal forms, such as Occupational Safety and Health Administration (OSHA) forms, electronically. And the Small Business Paperwork Reduction Act Amendments of 1999 (HR 391) would grant small businesses six-month grace periods for most first-time violations of federal paperwork regulations.

In addition, the Mandates Information Act (HR 350) would establish new procedural limitations on legislation that imposes federal mandates on the private sector. The act would require the Congressional Budget Office to prepare special cost estimates, called Consumer, Worker and Small Business Impact Statements, for new private sector mandates in bills. For legislation estimated to impose more than $100 million in costs on the private sector, the act would allow a separate debate and roll call vote in either the House or Senate to determine whether to proceed with the legislation.

NRCA has actively supported the Small Business Paperwork Reduction Act Amendments and Mandates Information Act. NRCA's Washington Office sent letters to each House member supporting both bills and, as an additional step presented a statement to the House Rules Committee in favor of the Mandates Information Act. The House Rules Committee, which determines the rules by which a bill is moved or considered in the House, held a hearing because the Mandates Information Act would involve a parliamentary procedure.

Other legislative and regulatory issues that NRCA's Washington Office is working on include:

• Budget and Appropriations
  
  NRCA worked hard to ensure that the passage of the Republican Budget Resolution included spending caps. Before the vote, Steven Kruger, president of L.E. Schwartz & Son Inc., Macon, Ga. and former NRCA president, sent a Western Union mailgram to the Senate and House stating: "NRCA urges you to support passage of the Republican Budget Resolution, which includes adhering to spending caps. NRCA encourages you to maintain true fiscal discipline and give some much needed tax relief to hardworking Americans."
  
  Now that the budget blueprint is in place and spending caps are set, the Senate and House appropriations committees are faced with the task of cutting unnecessary spending and, in some cases, freezing agency budgets, such as OSHA's.
  
  Within days following the bill's final passage, Chief Deputy Majority Whip Roy Blunt (R-Mo.) wrote NRCA the following note: "The Office of the Majority Whip is grateful for your willingness to put aside your own interests to shepherd this effort [that] will be so beneficial to all Americans. Thanks for all that you do."
  
  
• Skilled Workforce Enhancement Act
  
  The Skilled Workforce Enhancement Act of 1999 allows a small business employer who trains employees in highly skilled trades, which are defined as precision machinists, die makers, mold makers, tool and die designers, heating, ventilating, air conditioning, refrigeration, roofing contractors, the trade of masonry, and other trades specified in regulations prescribed by the Secretary of Labor, to receive a tax credit of $15,000 per employee per year for up to four years. In exchange for this credit, the employer must provide 2,000 hours of shop training per year, including classroom training, necessary to produce a skilled employee. This bill also defines a small business employer as any employer who employs 250 or fewer people a year. The bill was introduced by Representative Jim Talent (R-Mo.) on May 14, 1999 and has 16 bipartisan cosponsors.
  
  
• Estate Tax Relief/Repeal
  
  Currently, the estate tax (death tax) is so large that survivors must often liquidate to obtain enough cash to obtain the business. The tax can easily be over one-half of the estate. A study released by the Congressional Joint Economic Committee states that this tax "generates costs to taxpayers, [and] the economy,...that far exceed any potential benefits that it may arguably produce."
  
  Among its findings, the study also found that the death tax is a leading cause of dissolution of family-run businesses. It diverts resources from investment and employment, and it raises very little if any, net revenue for the federal government. Representatives Jennifer Dunn (R-Wa.) and John Tanner (D-Tenn.) introduced HR 8 that would eliminate the death tax over a 10-year period. NRCA is a member of the Family Business Estate Tax Coalition that is lobbying to include the Dunn-Tanner proposal in the House tax cut bill, which is scheduled to be finalized on July 16, 1999.
  
  
• Anti-Association Tax
  
  The Clinton Administration included in its FY2000 budget proposal a tax on investment income from associations. NRCA signed onto an open letter to Congress and also sent a letter to Senator Joe Lieberman (D-CT) urging Congress not to adopt this tax in any of the budget blueprints. Fortunately, the tax was not included in either the House or Senate budget resolutions.
  
  
• Miller Act Reform
  
  The Construction Industry Payment Protection Act, HR 1219, would amend the Miller Act, a federal statute that protects public funds by requiring prime contractors on all federal construction projects over $100,000 obtain surety bonds. Surety bonds are insurance products that guarantee the performance of another person to a third party. A payment bond guarantees that the contractor will pay the subcontractors and suppliers with whom the contractor has a contract.
  
  HR 1219 would raise the penal sum of the payment bond to equal the contract price. The penal sum is the total amount of protection offered by the bond. Currently, Miller Act payment bonds are capped at $2.5 million, a figure that could, in theory, prove inadequate if the contract price were especially large. In response to this concern, HR 1219 would raise the amount of the payment bond making adequate payment protection a certainty.
  
  HR 1219 also would prohibit any requirements that subcontractors waive their Miller Act payment bond rights prior to commencing work on the project. In addition, HR 1219 would allow a subcontractor to send a notice of claim on a payment bond by any method of delivery that produces verification from an independent third party. The construction industry is united behind the bill and on May 13, the House Government Reform Committee voted HR 1219 out of committee by a voice vote.
  
  
• NRCA's Fall Committee Meetings/Legislative Conference
  
  NRCA's Fall Committee Meetings and Legislative Conference will be held at the Loews L'Enfant Plaza Hotel, September 27 - 30, 1999 in Washington, DC. Contractor members, affiliates, manufacturers, and spouses will hear presentations from Capitol Hill notables and Washington political insiders. In addition, NRCA members will lobby members of Congress and their staffs on various issues.
  
  5/24/1999  
  
  

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