Stephanie Salmon, AFS Washington Office; Jeff Hannapel & Christian Richter, The Policy Group, Washington, D.C. WASHINGTON ALERT
Chair of Senate Finance Committee Releases Tax Reform Discussion Drafts
TOPICS COVERED INCLUDE INTERNAL TAX RULES, CAPITAL COST RECOVERY AND TAX ADMINISTRATION. In November, Senate Finance
Committee Chairman Max Baucus (D-Mont.) released three separate dis- cussion drafts covering international tax rules, capital cost recovery and tax administration to be considered as part of a comprehensive tax reform effort. In the draft proposal, Senator Baucus notes the rules for cost re- covery and accounting are outdated, overly complex and reward specific industries to the detriment of others. To address these issues, the discus- sion draft proposes a modernized set of cost recovery and accounting rules the committee believes are simpler, fairer and less burdensome on small businesses. The draft claims these reforms would also raise enough revenue from corporations in the long-term to finance a significant reduction in the corporate tax rate.
ON THE HILL
OSHA Issues New Recommended Permissible Exposure Limits for Chemicals in the Workplace
The Occupational Safety and Health Administration (OSHA) recently issued new voluntary standards for workplace chemical exposure. Rather than issue new regulations, OSHA is recommend- ing employers consider using these alternative Permissible Exposure Limits (PELs) presented in new annotated PEL tables on the OSHA website. Most of the current PELs have not been updated in decades and OSHA believes many of the current PELs do not sufficiently protect employee health.
Even though the alternative PELs are not federally enforceable, there is gen- eral concern among the business com- munity that a court may find that these “voluntary” limits establish appropriate exposure standards, and any exposure above these thresholds is harmful and potentially remunerated.
EPA Plans to Exempt Hydrants From Lead-Reduction Law
The Environmental Protection Agency
(EPA) said Dec. 16 it will revise its guidance regulating fire hydrants under a law to re- duce lead in drinking water if Congress fails to act before the law takes effect this month. In an email to stakeholders, the agency said its revised guidance would exempt fire hydrants from the Reduction of Lead in Drinking Water Act. In October, the agency issued guidance on the lead-free act that calls for regula- tion of fire hydrants. It then consulted with a wide range of municipal, industry and public industry representatives. Peter Grevatt, director of EPA's Office of Ground Water and Drinking Water, said the agency expected the Senate to pass a bill exempting fire hydrants from drinking water regulation before the Jan. 4 compli- ance date. On Dec. 11, a bipartisan group of senators introduced a companion bill (S. 1799) to a House-passed measure that would
exempt fire hydrants from the new lead requirements. The Community Fire Safety Act of 2013 (H.R. 3588), which passed the House on a 384-0 vote Dec. 2, would add fire hydrants to the list of devices, such as toilets and shower valves, that are exempt from the lead content standards of the Re- duction of Lead in Drinking Water Act (Pub. L. No. 111-380), which took effect Jan. 4.
Legislation to Create a National Energy Strategy Introduced
In November, Reps. David B. McKinley
(R-W.V.) and Diana DeGette (D-Colo.) introduced legislation (HR 3565) that would create a commission to evaluate national energy policy. The commission would be tasked with analyzing the accessibility, reliability and sustainability of domestic energy sources, including fossil fuels and renewables.
For additional information, contact Stephanie Salmon, AFS Washington Off ice,
202/842-4864,
ssalmon@afsinc.org. January 2014 MODERN CASTING | 19
Specifically, the discussion draft of- fers proposals to: • Replace current rules with a system that better approximates economic depreciation based on estimates from the Congressional Budget Office.
• Reduce the number of major de- preciation rates from more than 40 to five.
• Eliminate the need for businesses to depreciate each of their assets separately.
• Permanently increase Section 179 expensing to $1 million and expand the definition of qualify- ing expenses.
Some in the metalcasting and
manufacturing sectors are concerned the proposal on capital cost recov- ery could have a negative impact on manufacturers. The proposal signifi-
cantly changes the rules for deduct- ing research and development, advertising and energy production costs. Baucus’s proposal also would repeal the long-standing last-in, first-out (LIFO) rules, increasing taxes both retroactively and prospec- tively for LIFO users. A number of metalcasting facilities utilize LIFO. The immediate outlook for major
tax reform remains dim because of the continued partisan division in Congress and serious concerns raised by the proposal from the business community. Comments on the cost recovery
and tax accounting rules discussion drafts are due by Jan. 17, and com- ments can be sent to: Tax_Reform@
Finance.Senate.gov. Summaries of the draft proposal can be found on the Senate Committee website.
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