The CEO Council is pleased to provide its summary of legislative issues that we view as critical to growing Greater Philadelphia’s economy and quality of life. The CEO Council is committed to enhancing economic growth and prosperity in our region through regional and national policy.
These issues below and many others will be part of the dialogue at the February 12th Congressional Staff Luncheon. The CEO Council in partnership with the Chamber of Commerce for Greater Philadelphia will host this annual luncheon with congressional staff members of our region’s congressional delegation to discuss key legislative priorities. We expect chiefs of staff, state and district directors, and legislative directors from House and Senate offices representing southeastern Pennsylvania, southern New Jersey and northern Delaware.
Surface Transportation Reauthorization
The CEO Council expresses its sincere thanks to Members of our regional congressional delegation for their effort to pass a bipartisan long-term surface transportation reauthorization, the Fixing America’s Surface Transportation (FAST) Act.
The FAST Act is a five-year, adequately-funded surface transportation reauthorization of federal highway, transit, highway safety, motor carrier safety, hazardous materials, and passenger rail programs. The bill reforms and strengthens transportation programs, provides long-term certainty and more flexibility for states and local governments, and streamlines project approval processes.
This transportation bill is an important legislative victory for the CEO Council, which has long advocated for adequate and sustained funding for roads, highways, bridges, and transit to revitalize and enhance the region’s mobility. Passage of the FAST Act serves as the first long-term surface transportation reauthorization in a decade and puts to an end the recent string of short-term extensions and funding patches passed by Congress which have challenged local and state governments’ ability to plan for major transportation projects.
Omnibus Appropriations Bill
On December 18, President Obama signed the Omnibus Appropriation Bill after its approval by the House and Senate. The bill includes $680 billion in permanent and short-term extensions of tax breaks for businesses and individuals. The CEO Council applauds our congressional delegation for their work towards passage of the following spending measures and tax breaks & credits:
· Expansion and permanent extension of the expired Research & Development (R&D) tax credit, which provides companies an assured and enhanced incentive to invest in innovation. A permanent R&D tax credit fosters job growth and instills long-term certainty for R&D enterprises, which are a critical part of our region.
· Expansion of the R&D tax credit to include qualified small business to claim the credit against their employment taxes instead of their income taxes, similar to the provisions that have been included in the Startup Innovation Credit Act. The tax credit for young start-ups frees up critical resources for new companies that have not yet created significant income tax liability to take advantage of the R&D tax credit.
· Permanent extension of the expired provision the enables tax-free qualifying charitable distributions directly from IRAs by individuals age 70 and older. The Chamber is an active member of the Pennsylvania Gives coalition, which is dedicated to preserving the charitable tax deduction.
· Above inflation increases to important federal accounts responsible for dispersing research funds. The National Institutes of Health received a 6.6% increase from the year before, the largest increase in a dozen years. The Chamber and CEO Council advocate for adequate federal funding of basic and translational research in coordination with the national effort of the Business for Federal Research Funding coalition. Together, the coalition is bringing increased focus on the importance of funding for research and its long-term economic contributions to the nation’s economy.
· Permanent renewal of the expired Section 179 small business expensing limitation and phase-out amounts, which allows businesses to deduct the purchase price of qualifying equipment and/or software purchased or financed during the tax year.
· Two-year suspension of medical device excise tax which unfairly targets an important industry to the region by taxing medical device sales regardless of profitability. The tax stifles innovation by increasing the effective tax rate for many medical technology companies, thereby reducing financial resources that should be used for R&D, clinical trials, and investments in manufacturing.
· Permanent extension of Section 1202, the exemption of capital gains taxes on the sale of qualifying small business stock held for at least five years by non-corporate taxpayers, which can attract investors that can provide financial stability to the growth of the business.
· Expansion of the definition of eligible recipients that can secure federal funding, i.e., National Science Foundation, for commercialization to include organizations that facilitate and accelerate commercialization of technologies that are developed at research institutions
International Tax Reform
After successful passage of the tax break extension package last month, House Ways and Means Committee Chairman Kevin Brady recently expressed his interest in proceeding with the next step in incremental tax reform with an international tax package, which would tap into the $2 trillion in offshore corporate earnings with a repatriation provision in exchange for business tax provisions and a lower overall corporate rate.
The CEO Council supports reforms to the international tax system which will help companies compete globally, grow domestically, and increase repatriated income. U.S. multinationals are taxed here on their domestic profits, taxed abroad on their foreign profits, and then taxed again when their foreign profits are brought back home. Under the current deferral system, U.S. firms have a big incentive to leave their foreign earnings offshore, where they can avoid U.S. taxes. Congress should adopt a tax system that will help American companies build global brands while continuing to strengthen operations back home. Eliminating all or most of the double-tax on repatriated income from foreign affiliates would remove a competitive disadvantage and encourage greater investment in our economy from foreign profits.
Perkins Loan Program
The CEO Council applauds Congress for extending the $1 billion Perkins loan program, which had expired September 30th. Congress extended the Perkins Loan through fiscal 2017 for undergraduate students and through fiscal 2016 for graduate students. Perkins has made college possible for millions of students who would otherwise have been unable to attend or been forced to take on costly private loans.
The CEO Council joins more than 350 organizations nationwide in support of reauthorization of the Carl D. Perkins Career and Technical Education (Perkins) Act, which helps our region close the skills gap between the shortage of skilled workers and the supply of in-demand positions. Career and technical education (CTE) programs, throughout the country, are central to overcoming this skills gap. CTE is an effective tool for improving student outcomes and helps prepare both secondary and postsecondary students with the necessary academic, technical, and employability skills required for successful entry into the workforce. Indeed, CTE prepares students both for college and careers.
Reauthorizing the Perkins Act is critical for the continued economic prosperity of the United States and ensures the country remain a leader in global competitiveness. As Congress sets out on this task, we urge you and your colleagues to focus on areas where improvements can be made to current law, building upon its past successes and enhancing aspects of the Perkins Act, which will help to better serve both workers and employers. A reauthorized version of Perkins should:
· Align CTE programs to the needs of the regional, state, and local labor market;
· Support effective and meaningful collaboration between secondary and postsecondary
· institutions and employers;
· Increase student participation in experiential learning opportunities such as industry
· internships, apprenticeships and mentorships; and
· Promote the use of industry-recognized credentials.
These improvements will more effectively spend federal dollars to help our nation’s students acquire the skills that they need and that employers are demanding. We urge our delegation to move forward with this important work.