Tag: Senate

Senate Takes on Business Tax Reform; Treasury to Have “Intense Comment Period” for Inversion Regulations

Legislative Activity

Senate to Consider Business Tax Reform Proposals

Following multiple hearings on tax reform thus far this year in the House Ways and Means Committee, this week the Senate Finance Committee will hold a hearing on business tax reform. During the hearing, the difference between Republican and Democrat approaches to taxing corporate income, including what the top rate on corporations should be, will be on full display. In advance of the hearing, the Joint Committee on Taxation (JCT) has released an overview of various proposals for business tax reform, including: (1) the President’s framework; (2) reforms that both maintain and change the structure of the current business tax regime; and (3) proposals to shift to a consumption-based regime. As part of the Committee’s efforts on business tax reform, Senator Orrin Hatch (R-UT) last week reaffirmed his commitment to move forward with his “corporate integration” proposal by the end of June, noting that he is still awaiting a score from JCT before proceeding. For his part, Senate Finance Committee Ranking Member Ron Wyden (D-OR) this week is expected to introduce a proposal that would modify current corporate depreciation schedules – something former Senate Finance Committee Chairman Max Baucus (D-MT) also did during his time in the Senate.

As for tax reform efforts in the House, Ways and Means Committee Chairman Kevin Brady (R-TX) has announced his plans to release a comprehensive tax reform “blueprint” by June of this year as part of Speaker Paul Ryan’s (R-WI) Tax Reform Task Force efforts, while Representative Charles Boustany (R-LA) is expected to continue with his efforts on international tax reform – though whether we will see any action this year on his plan remains to be seen.

Notably, as both House and Senate tax-writers debate the best path forward for tax reform, Republicans lawmakers are pushing for the adoption of Representative Bob Goodlatte’s (R-VA) plan (H.R. 29, Tax Code Termination Act) that would repeal the Internal Revenue Code by 2019 and require Congress to approve a new system of taxation by July of that year. While the future of this legislation is uncertain – and no Senate counterpart exists – there are presently more than 130 co-sponsors in the House.

This Week’s Hearings:

  • Tuesday, April 26: The Senate Finance Committee will hold a hearing titled “Navigating Business Tax Reform.”

Regulatory Activity

Treasury Open to “Intense Comment Period” on Inversion Regulations

Following intense scrutiny and pushback from industry, last week Treasury Deputy Assistant Secretary Bob Stack acknowledged that Treasury “may have missed things” in its latest rulemaking targeting  inversions and the ability of multinational corporations to engage in so-called “earnings-stripping” practices. This acknowledgement comes at the same time that 18 former Treasury officials sent a strongly-worded letter to Treasury Secretary Jack Lew urging his Department to focus on reforming the tax Code, not on inversions as a standalone issue.

In looking ahead, Mr. Stack has promised that Treasury “will have an intense comment period, [and] be listening to taxpayers.” He also suggested that Treasury “want[s] to do things that are both right from a policy point of view and also minimize burdens on companies…[but] [t]he answer to inversions is not to join the race to the bottom so that we have ultimately a zero tax rate.” Notably, Internal Revenue Service (IRS) Commissioner John Koskinen has indicated that the IRS does not intend to put out any “significant” regulations past Labor Day, which creates a rather tight timeframe for Treasury to digest the responses to its proposed regulations and still finalize the regulations this year.

Separately, partly spurred by fallout from the “Panama Papers” fiasco, the Treasury Department has announced that it also soon plans to finalize rules proposed in 2014 that would require the beneficial owners of single-member LLCs to identify themselves to the IRS. According to Treasury Secretary Lew, this, along with widespread implementation of the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Project and its proposal to require country-by-country reporting of certain tax information by large multinational corporations will help combat tax evasion.

Article By Brandon C. Roman & Stephanie L. Shaker of Squire Patton Boggs (US) LLP
© Copyright 2016 Squire Patton Boggs (US) LLP

Winter Weather Causes Congressional Cancellations

Legislative Calendar in Flux from Winter Storm Jonas

Following severe weather in Washington this weekend, this week’s legislative calendar is in flux. As noted below, the Senate has delayed its scheduled by a day (for now) and the House has cancelled session for the week. As such, it is unclear to what extent Committee work will be impacted.

Senate Legislative Activity

Due to this weekend’s winter storm, the Senate has pushed its schedule back a day. As such, the Senate will now meet on Wednesday, January 27. At 5:30pm, the Senate is expected to take up the confirmation of Executive Calendar #306, the nomination of John Michael Vazquez, of New Jersey, to be United States District Judge for the District of New Jersey. The delay has also called into question the exact timing of the Senate’s consideration of S.2012, Energy Policy Modernization Act of 2015.

House Legislative Activity

As a result of this weekend’s inclement weather, the House will not be in session this week. Next votes are scheduled for Monday, February 1 at 6:30pm, during which time Members will consider:

  • H.R. 3662, Iran Terror Finance Transparency Act; and

  • the Veto Message on H.R. 3762, Restoring Americans’ Healthcare Freedom Act

Article By Brandon C. Roman of Squire Patton Boggs (US) LLP

© Copyright 2015 Squire Patton Boggs (US) LLP

Senate Passes the Every Child Achieves Act to Replace No Child Left Behind

Recently, the Senate passed the Every Child Achieves Act to replace No Child Left Behind, which was seven years past the reauthorization date. This bipartisan agreement was shepherded through the Senate by the Senate Health, Education, Labor, and Pensions Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.)

What the Every Child Achieves Act Does

  • Strengthens state and local control – The bill recognizes that states, working with school districts, teachers, and others, have the responsibility for creating accountability systems to ensure all students are learning and prepared for success. These accountability systems will be state-designed but must meet minimum federal parameters, including ensuring all students and subgroups of students are included in the accountability system, disaggregating student achievement data, and establishing challenging academic standards for all students. The federal government is prohibited from determining or approving state standards.

  • Maintains important information for parents, teachers, and communities – The bill maintains the federally required two annual tests in reading and math in grades 3 through 8 and once in high school, as well as science tests given three times between grades 3 and 12. These important measures of student achievement ensure that parents know how their children are performing and help teachers support students who are struggling to meet state standards. A pilot program will allow states additional flexibility to experiment with innovative assessment systems. The bill also maintains annual data reporting, which provides valuable information about whether all students are achieving, including low-income students, students of color, students with disabilities, and English learners.

  • Ends federal test-based accountability – The bill ends the federal test-based accountability system of No Child Left Behind, restoring to states the responsibility for determining how to use federally required tests for accountability purposes. States must include these tests in their accountability systems, but will be able to determine the weight of those tests in their systems. States will also be required to include graduation rates, another measure of academic success for elementary and middle schools, English proficiency for English learners. States may also include other measures of student and school performance in their accountability systems in order to provide teachers, parents, and other stakeholders with a more accurate determination of school performance.

  • Maintains important protections for federal taxpayer dollars –The bill maintains important fiscal protections of federal dollars, including maintenance of effort requirements, which help ensure that federal dollars supplement state and local education dollars, with additional flexibility for school districts in meeting those requirements.

  • Helps states fix the lowest-performing schools – The bill includes federal grants to states and school districts to help improve low-performing schools that are identified by the state accountability systems. School districts will be responsible for designing evidence-based interventions for low-performing schools, with technical assistance from the states, and the federal government is prohibited from mandating, prescribing, or defining the specific steps school districts and states must take to improve these schools.

  • Helps states support teachers –The bill provides resources to states and school districts to implement activities to support teachers, principals, and other educators, including allowable uses of funds for high quality induction programs for new teachers, ongoing rigorous professional development opportunities for educators, and programs to recruit new educators to the profession. The bill allows, but does not require, states to develop and implement teacher evaluation systems.

  • Reaffirms the states’ role in determining education standards – The bill affirms that states decide what academic standards they will adopt, without interference from Washington, D.C. The federal government may not mandate or incentivize states to adopt or maintain any particular set of standards, including Common Core. States will be free to decide what academic standards they will maintain in their states.

ARTICLE BY Bruce H. Stern of Stark & Stark

COPYRIGHT © 2015, STARK & STARK

Senate Democrats Continue To Push For A Budget Deal; House And Senate Continue Appropriations Markups

Senate Democrats Continue to Push for a Budget Deal

In the coming weeks, Senate Democrats will implement a strategy intended to force Republicans into a budget deal. Senate Democratic leadership does not want to rely on President Obama’s vetoes of appropriations bills to force Republicans into negotiations, and will likely prevent any appropriations bills that retain the sequester’s spending limits from reaching the Senate floor. Senate Appropriations Committee Ranking Member Barbara Mikulski (D-MD) said Democrats intend to be at the table during any budget deal negotiations between President Obama and Senate and House Republicans, noting Senate Democrats “are doing everything to force this issue.” Additionally, Senate Democratic Whip Dick Durbin (D-IL) said the plan is to force Republicans to make a deal now, rather than wait until the end of the fiscal year after the President vetoes appropriations measures. He noted that “as long as the Republicans need 60 votes in the Senate and don’t have them, they’ll need Democratic cooperation.”

While the House has been moving appropriations measures at a quick pace, and the Senate has been making progress on their Appropriations Committee markups, the appropriations process could slow down in the coming weeks as Senate Republicans try to bring the Defense Appropriations Bill to the floor (as of the time of writing this report, Senate Majority Leader Mitch McConnell (R-KY) had not yet scheduled floor time for the Defense Appropriations Bill). Democrats are expected to block the measure, as it increases defense spending without increasing non-defense discretionary spending. If Democrats are successful, it could effectively stop further Senate appropriations efforts on the floor, though the Senate Appropriations Committee will likely continue to pass appropriations bills out of committee, laying the groundwork for an omnibus bill later in the year.

This Week’s Hearings:

  • Wednesday, June 17: The Senate Budget Committee will hold a hearing titled “CBO’s Long Term Fiscal Outlook for the Nation.”

  • Wednesday, June 17: The House Budget Committee will hold a hearing titled “Why Congress Must Balance the Budget.”

FY 2016 Appropriations Committee/Subcommittee Markup Hearings

  • Tuesday, June 16: The Senate Appropriations Homeland Security Subcommittee will hold a markup of the FY 2016 Homeland Security Appropriations Bill.

  • Tuesday, June 16: The Senate Appropriations Interior, Environment, and Related Agencies Subcommittee will hold a markup of the FY 2016 Interior and Environment Appropriations Bill.

  • Tuesday, June 16: The House Appropriations Committee will hold a markup of the FY 2016 Interior and Environment Appropriations Bill.

  • Wednesday, June 17: The House Appropriations Labor, Health and Human Services, Education, and Related Agencies Subcommittee will hold a markup of the FY 2016 Labor, Health and Human Services, and Education Appropriations Bill.

  • Wednesday, June 17: The House Appropriations Committee will hold a markup of the FY 2016 Financial Services and General Government Appropriations Bill.

ARTICLE BY Timothy W. Drake & Pamela K. Welsh of Squire Patton Boggs (US) LLP
© Copyright 2015 Squire Patton Boggs (US) LLP

Lawmakers Respond To Results Of TSA Internal Investigation

Upon news that Transportation Security Administration (TSA) screeners failed to detect prohibited items in 67 out of 70 test cases conducted by U.S. Department of Homeland Security (DHS) Inspector General undercover teams, the acting TSA Administrator was reassigned and replaced by Acting TSA Deputy Administrator Mark Hatfield. Undercover agents posed as passengers and attempted to smuggle mock explosives or banned weapons through airport checkpoints.

President Obama has nominated Coast Guard Vice Admiral Peter Neffenger to serve as TSA Administrator and Assistant Secretary at DHS. His nomination is scheduled for consideration by the Senate Homeland Security and Governmental Affairs Committee this week, following his approval by the Senate Commerce, Science, and Transportation Committee last week. DHS Secretary Jeh Johnson also called for a detailed briefing from the DHS Inspector General and directed TSA to implement a series of immediate and near-term actions.

Both House Homeland Security Committee Chairman Mike McCaul (R-TX) and Ranking Member Rep. Bennie Thompson (D-MS) issued statements expressing concerns with TSA’s ability to prevent weapons from getting onto airplanes, calling the test results disturbing and alarming.

The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on TSA oversight with DHS Inspector General John Roth and other government representatives this week, and continued scrutiny from Capitol Hill will certainly follow.

This Week’s Hearings:

  • Tuesday, June 9: The Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled “Oversight of the Transportation Security Administration: First-Hand and Government Watchdog Accounts of Agency Challenges.”

  • Wednesday, June 10: The Senate Homeland Security and Governmental Affairs Committee will hold a hearing to consider the nomination of Vice Admiral Peter Neffenger to serve as Administrator of the Transportation Security Administration and Assistant Secretary at the Department of Homeland Security.

  • Wednesday, June 10: The House Homeland Security Subcommittee on Emergency Preparedness, Response, and Communication will hold a hearing titled “Defense Support of Civil Authorities: A Vital Resource in the Nation’s Homeland Security Missions.”

ARTICLE BY Ludmilla L. Savelieff & Norma M. Krayem of Squire Patton Boggs (US) LLP
© Copyright 2015 Squire Patton Boggs (US) LLP

Senate Approves Energy Tax Extenders

Mcdermott Will Emery Law Firm

On Tuesday, December 16, 2014, the U.S. Senate passed the tax extenders bill by a vote of 76-16, extending a number of energy tax incentives through the end of the year.  The Senate’s passage of H.R. 5771 followed the U.S. House of Representatives’ (House) approval earlier this month (see our post on December 8), and the bill is expected to be signed into law by President Obama as early as this week.

The $42 billion bill includes extensions through the end of the year of nearly $10 billion in energy tax incentives, including the New Market Tax Credit in Section 45D, the Production Tax Credit in Section 45 (the PTC), and the bonus depreciation rules in Section 168(k).

Many were disappointed that some of the tax incentives – including the PTC – were extended retroactively only through the end of the year, meaning that tax payers have just a few weeks left to take advantage of them. There would have been far more certainty for companies looking to invest in renewable energy projects if the tax incentives were extended for one or more years beyond the end of 2014.  Several lawmakers suggested that the two week extension was better than nothing, but the short extension period means that Congress has merely punted the need for greater tax reform in this area into 2015.  As it stands, the energy tax incentives extended by this bill will have expired by the time Congress returns to Washington, D.C., on January 6, 2015, following its winter break.  That means that Congress may be in the same place again next year under pressure to pass a year-end bill – instead of focusing on more comprehensive reform and a possible phase-out of the PTC.

ARTICLE BY

Heather Cooper
OF
McDermott Will & Emery

Energy and Environmental Law Update: Week of 8/25/2014

Mintz Levin Law Firm

Now that summer is drawing to a close, let’s check in on one important bill that lost momentum just as the summer was beginning. Remember the Senate Finance Committee’s tax extenders package (S. 2260), which the committee marked up on a bipartisan basis in mid-May? The one that was poised to pass the Senate but that surprisingly failed to reach cloture after Senate leadership blocked Republican amendments on the bill? At the time, congressional staff and lobbyists—and even Majority Leader Harry Reid (D-NV) —suggested that the extenders package would come up again in the lame duck session after the November election. The House was not expected to vote on an extenders package before then anyway, so the Senate delay would not really impact the timing of final passage of this two-year extension of more than 50 tax provisions.

Well, that was then. Today, almost two months before the mid-term elections, the future of the clean energy provisions in an extenders package—particularly the production tax credit (PTC) and investment tax credit in lieu of the PTC—depends a great deal on which party wins control of the Senate. Republicans are more confident that they can win the necessary six seats to take back the top chamber; and if they do, they will have more leverage in the lame duck about what the contents of an extenders package would be. The $84 billion EXPIRE Act of 2014 not only extends the PTC by two years but also extends key clean energy depreciation benefits and tax credits, including a $1-per-gallon credit for biodiesel and a 50-cent-per-gallon credit for alternative fuels. Senate Democrats strongly support the clean energy provisions. Certain Republicans, such as Chuck Grassley (R-IA), remain staunch supporters of the PTC and biodiesel credits, but many other Republicans are eager to eliminate or scale back the PTC and other clean energy provisions. If Senator Orrin Hatch (R-UT) learns he will be chairman of the Finance Committee next year in a Republican chamber, he has less of an incentive to work with current Chairman Ron Wyden (D-OR) and Democrats during the lame duck session. He can simply hold out and put forward his own extenders bill next year with popular provisions like the research and experimentation (R&D) credit and without clean energy incentives.

The extension of a handful of relatively popular and less controversial business and individual extenders such as the R&D credit and bonus depreciation are more assured. House Republicans, as part of a “tax-reform-lite” effort, have passed several bills making select provisions such as these permanent. For clean energy advocates, they have to cling to the more popular parts of the overall package and make sure their provisions are not trimmed away when Congress eventually takes it up. The business community, which wants many of the non-energy provisions in the EXPIRE Act extended, also must be much more vocal if the bill is to rise to the front of the agenda.

If Democrats do manage to hold onto control of the upper chamber, they very likely will be dealing with a reduced majority, and that too will give Republicans more leverage. With all the competing priorities in a very short legislative period, it will be difficult for the package to be enacted before the end of the year. Another retroactive extension in early 2015 could be possible. Congress has let the PTC lapse several times since 1992 before renewing it again. While it’s hard to avoid feeling a feeling of déjà vu when faced with another “will-they-or-won’t-they” end-of-year extension, this time also seems different. Many legislators thought the previous PTC extension would be the last one, so the stakes are high. Anti-PTC campaigns financed by conservative groups and utilities ratchets up the pressure on lawmakers. One possible way to blunt some Republican opposition would be to modify the PTC and either reduce the amount of the credit or include a deadline by which projects must complete construction—or both.

Several scenarios exist where even a change of control in the Senate would not preclude the passage of a tax extenders package. A short-term extension would give lawmakers some breathing room to debate tax reform. Some Republicans from wind-friendly states might prefer the clean energy provisions to pass under a Democratic watch rather than under Republican leadership in the new Congress. In this optimistic scenario, the lame duck session could mirror the productive session of 1980.

Ironically, election results in any one of three bio-energy and wind states–Colorado, South Dakota, and Iowa—could help decide the balance in the Senate and the fate of clean energy tax credits.

ARTICLE BY

Bryan M. Stockton
 
OF 
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

The North Carolina Senate Passes Energy Modernization Act

Womble Carlyle

When I was a child, and daring, “frack” was my risky substitute cuss word; but not substitute enough…. Well it’s back at the General Assembly this summer as lawmakers set the stage for hydraulic fracturing “fracking” in North Carolina. Opponents claim there is not enough clarity regarding the rights of property owners under which the fracking might occur and not enough public disclosure regarding what chemicals are used in the fracking process. Proponents insist that the revenue and job creating opportunity is too good to delay further and that the state’s Mining Commission can adequately oversee the process.

SB 786 – Energy Modernization Act. Also known as An Act to

(1) Extend the Deadline for Development of a Modern Regulatory Program for the Management of Oil and Gas Exploration, Development, and Production in the State and the Use of Horizontal Drilling and Hydraulic Fracturing Treatments for that Purpose;

(2) Enact of Modify Certain Exemptions from Requirements of the Administrative Procedures Act Applicable to Rules for the Management of Oil and Gas Exploration, Development, and Production in the State and the Use of Horizontal Drilling and Hydraulic Fracturing Treatment for that Purpose;

(3) Create the North Carolina Oil and Gas Commission and Reconstitute the North Carolina Mining Commission;

(4) Amend Miscellaneous Statutes Governing Oil and Gas Exploration, Development, and Production Activities;

(5) Establish a Severance Tax Applicable to Oil and Gas Exploration, Development, and Production Activities;

(6) Amend Miscellaneous Statutes Unrelated to Oil and Gas Exploration, Development, and Production Activities; and

(7) Direct Studies on Various Issues, as Recommended by the Joint Legislative Commission on Energy Policy.

Attempts to amend the bill with stricter water quality and property protections failed. The latest version of the bill is here: http://www.ncleg.net/Sessions/2013/Bills/Senate/PDF/S786v2.pdf