View Full December PDF Issue - Utility Contractor Online

Inside Washington Special Report
Grassroots Efforts and Coalition-Building Bring NUCA Values to the 112th Congress
By Eben Wyman
The first session of the 112th Congress began
and ended with two huge legislative victories
for utility and excavation contractors
and American businesses around the country.
Repeal of both the “1099 paperwork provision” and
“3 percent withholding tax” showed what can happen
when likeminded organizations work collectively to
block overly short-sighted government policy.
At the same time, the industry took a significant hit on
public financing for water and wastewater infrastructure
financing programs. Yet we were pleased with quick and
substantial progress this year on legislation that would
increase opportunities for public-private partnerships
funded by private activity bonds. Reauthorization of the
nation’s surface transportation system continued to face
steep challenges, and the concept of establishing a national
infrastructure bank raised some eyebrows on and
off Capitol Hill. A very serious threat to traditional global
positioning systems (GPS) from a telecommunications
start-up mobilized several federal agencies, the construction
industry and all users of GPS.
All in all, it was a pretty good year for NUCA, and the
Association is now gearing up for what will be an exciting
and incredibly important second session, where every
day into a presidential election year further reduces
the chances of getting essential legislation done.
1099 Repeal Starts the Year
Out Right
Marking a huge win for NUCA and fellow member
organizations of the Small Business Coalition for Affordable
Healthcare (SBCAH), Congress passed the Comprehensive
1099 Taxpayer Protection and Repayment
of Exchange Subsidy Overpayments Act of 2011 (HR
4) in April. The legislation repealed the atrocious “1099
paperwork requirement” that was buried in the massive
2009 healthcare package. The mandate would have required
businesses to track and report most business-tobusiness
transactions above $600 to the IRS. For many
businesses, this would have amounted to hundreds of
new reportable transactions, involving 1099 reports sent
to both the IRS and the reportable business.
In a strongly worded letter to Congress, the SBCAH
noted that recent studies show that “the cost of complying
with the tax code is 66 percent higher for a
small business as compared to a large business. Small
businesses lack the compliance capabilities to track
and report each new transaction, and in order to comply
with this new requirement, they will have to pull
capital out of the business that could be better used to
reinvest in the business and create jobs.”
The 1099 repeal was a big victory, but NUCA and
the SBCAH are not finished with the Patient Protection
and Affordable Care Act (P.L. 111-148). We will continue
efforts to repeal the employer mandate, as well as
various tax issues that will burden American businesses
if the healthcare law continues to be implemented (depending
on consideration by the Supreme Court).
Withholding Tax Fully Repealed by
Overwhelming Margins
In one of the biggest legislative victories for NUCA in
recent years, the House and Senate voted unanimously
to repeal the “3 percent government withholding tax,”
which was quickly signed by the President. After weeks
of back and forth between the House and Senate, the
House passed the Senate-amended version of the bill.
As a member of the Government Withholding Relief
Coalition (GWRC), NUCA and hundreds of business
organizations worked for more than five years to raise
awareness about the withholding tax and build support
for its repeal. Scheduled to be implemented in 2012, the
mandate would have required virtually all federal, state
and local government entities to withhold 3 percent of
payments to contractors and other organizations that
provide goods and services to them. The withholding
provision was already proving costly as the implementation
deadline moved closer.
Rep. Wally Herger (R-Calif.), a longtime champion
on this issue, underscored the economic impacts that
would come with repeal. “When small business owners
are evaluating whether their investments will allow
them to make a living, it matters if a new tax like this
is going to cut off their cash flow in just over a year,”
Rep. Herger said. “Repealing this detrimental mandate
is an important step in making it easier for small businesses
to create jobs.” NUCA appreciates the work of
Rep. Herger and Rep. Earl Blumenauer (D-Ore.), who
stepped up this year as the lead Democrat in this effort.
Rest assured, this victory would not have been possible
12 Utility Contractor | December 2011