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News

NECA Legislative Top Three 5/31/19: NECA Legislative Agenda on the Move

May 30, 2019

1. NECA-Sponsored 529 Legislation Passes House

One of NECA’s top legislative priorities, allowing 529 savings accounts to be used for apprenticeship programs, passed in the House last Thursday in a 417 to 3 vote.

NECA’s Look Ahead: The 529 reform language, which has been championed in the House by Rep. Donald Norcross (D-NJ) and Rep. Mike Kelly (R-PA) was included in SEC. 302 of H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The bipartisan legislation is expected to be taken up in the Senate later this summer. NECA will continue to work with Senate leadership to ensure passage of this legislation into law.

2. NECA Works with S-Corp. Association to Monitor Excise Tax on Private Companies

NECA, as a member of the S-Corporation Association, sent comments to the Department of Treasury, raising concerns over the potential harm of Section 4960 excise tax on private companies.

NECA’s Look Ahead: NECA, along with other coalition members, is continuing to monitor the Section 4960 excise tax applied to private companies with highly compensated executives.  The Section 4960 excise tax was part of tax reform and it was supposed to be a tax on excess compensation for employees of non-profits, mirroring the excess comp rules for public companies.  But the new tax includes some expansive related entity rules, and the guidance issued by Treasury makes them even broader, with the result of possibly pulling in compensation from private companies. NECA is concerned that this error in the drafting of the law has created an unintentional backdoor means of applying a salary limitation to private companies. We will continue to monitor the situation as we wait for guidance from the Department of Treasury.

3. NECA-Supported Bill Introduced to Repeal the Use of Reverse Auctions

Late last week, Sen. Rob Portman (R-OH) and Sen. Mazie Hirono (D-HI) introduced legislation that would repeal the use of reverse auctions on federal construction contracts. Reverse auctions originally placed into law to limit expenditures from the federal government have proven ineffective and imprudent. As this procurement tool has demonstrated limited benefit to the federal government and no support from the contracting world, both Senators received strong support from groups across the Hill.

NECA’s Look Ahead: NECA has long supported the full repeal of this detrimental procurement tool, which drives the competitive bidding system to the bottom. This process has not helped the federal construction agencies as contractors are forced to cut costs in areas that not only affect their already dwindling bottom lines, but begin to damage the key relationships and the quality of the end product on a job.