1. Senate Environment and Public Works (EPW) Chairman Jim Inhofe (R-OK) and Ranking Member Barbara Boxer (D-CA) introduced and reported out of Committee by a 19-1 vote, the Water Resources Development Act of 2016 (WRDA). The legislation authorizes funding for 25 critical U.S. Army Corps of Engineers (USACE) projects in 17 states, provides critical investment in our nation’s aging drinking water and wastewater infrastructure, assists poor and disadvantaged communities in meeting public health standards under the Clean Water Act and Safe Drinking Water Act, and promotes innovative technologies to address drought and other critical water resource needs. The bill also responds to the drinking water crisis in Flint, Michigan, by providing emergency assistance to Flint and other similar communities across the country facing drinking water contamination.
NECA’s Look Ahead: These projects, which have undergone Congressional scrutiny and have completed reports of Army Corps’ Chief of Engineers, will provide opportunity for NECA contractors to work on numerous waterways, clean water and wastewater infrastructure projects.
To read a three page summary of the bill, click here.
To read a full section by section analysis of the bill, click here.
To read the full text of the bill, click here.
2. Two major bills affecting the tax code and how NECA contractors can better compete in the marketplace were introduced this week in the House of Representatives:
- The first bill, the Main Street Fairness Act (H.R. 5076), sponsored by Rep. Vern Buchanan (R-FL), would establish that businesses that file taxes as pass-through income, such as sole proprietorships, partnerships, LLCs and S Corporations, would never pay a higher rate than a C Corporation.
- The second bill, the Clarify Workers Misclassification in the Construction Industry Act (H.R. 5008), sponsored by Reps. Tom MacArthur (R-NJ) and Ron Kind (D-WI), would "direct the Secretary of the Treasury to improve tax compliance in the construction industry, including clarifying the employment status of service providers in the construction industry.”
NECA’s Look Ahead: The Main Street Fairness Act would produce an immediate benefit for NECA contractors organized as S Corporations, as well as a long-term benefit if the corporate rate were to be lowered in broader tax revamp legislation. In some instances, pass through companies pay a higher rate than the top statutory tax rate of 35 percent and can equal 39.6 percent. This bill addresses a major NECA priority, bringing parity to both S and C Corporations. Both bills are not likely to receive major action this year, but will help set the stage for comprehensive tax reform in 2017.
3. On April 28, the Pension Benefit Guaranty Corporation proposed to cut penalties for late payment of premiums in an effort to reduce costs and make it easier for plan sponsors to maintain traditional pension plans.
NECA’s Look Ahead: Currently, PBGC uses a two-tiered penalty structure that rewards self-correction. A lower rate of 1 percent of the late payment per month applies when a delinquency is corrected before PBGC notifies the sponsor. A higher rate of 5 percent applies if the correction is made following PBGC notification. Penalties in the first category are capped at 50 percent of the late amount, and 100 percent in the second instance. The proposed rule would reduce penalties for late payers by half. Additionally, for sponsors with good payment histories that pay promptly following notification of late payment, PBGC will reduce the penalty by 80 percent. Lastly, a summary of past, current, and future rates is available on PBGC's website.