Once Again, the House Approves a Measure to Simplify State Taxation of Non-resident Workers

By | Shopfloor Policy, Taxation | No Comments

The House this week, by voice vote, approved the Mobile Workforce State Income Tax Simplification Act of 2017 (H.R. 1393) that clarifies and simplifies the ability of states to tax non-resident employees. The legislation—which sets a bright line test for when states can tax income earned by nonresident workers—has been approved by the House in earlier Congresses but has yet to pass the Senate.

Many manufacturers have employees who travel outside their home states as part of their job. Unfortunately, these out-of-state assignments sometimes result in an arbitrary compliance burden and tax liability for both employees and employers. In particular, employees are required to track and comply with various tax filing requirements while employers are required to maintain records and withhold state income taxes for these employees. This is particularly onerous for small and medium-sized manufacturers that do not have in-house tax departments. Clarifying the ability of states to tax mobile workforces will free up resources for employers to use in their business and leave more money in the paychecks of their employees.

Now that the House has—once more—supported this common-sense legislation, the NAM urges the Senate to follow suit and pass H.R. 1393.

Manufacturers Support Revisiting Dodd-Frank

By | Regulations, Shopfloor Policy | No Comments

The House this week will vote on the Financial CHOICE Act (H.R. 10), a bill that would roll back a number of job-killing, anti-investment provisions in the Dodd-Frank Act. During the legislative consideration of the Dodd-Frank Act in 2009 and 2010, the National Association of Manufacturers (NAM) repeatedly urged Congress to focus its efforts on strengthening the U.S. financial system. Unfortunately, this didn’t happen, and we are pleased that the House is revisiting a number of these ill-conceived provisions.

The bill would repeal the so-called “pay ratio” rule, which requires companies to regularly disclose the ratio of employees’ median pay to the compensation of the company’s chief executive. Despite the absence of a clear benefit, this rule would require thousands of manufacturers in the United States to incur significant financial cost, dedicate substantial man-hour resources and overcome numerous administrative challenges to comply with the rule.

The CHOICE Act also raises the threshold so that only shareholders who hold at least 1 percent of the company’s stock for three years can submit a proposal on a company’s ballot and excludes a shareholder proposal if a similar proposal appeared on the ballot and was defeated within the past five years.

It also brings transparency to proxy advisory firms by requiring them to register with the Securities and Exchange Commission (SEC) and adopt conflict-of-interest policies. Proxy advisory firms are third-party groups that provide proxy voting advice for investors. Two firms—Institutional Shareholder Services, Inc. and Glass, Lewis & Co.—control 97 percent of the proxy advisory market and wield tremendous power in shaping corporate governance, yet they are virtually unregulated entities.

Finally, H.R. 10 would repeal a Dodd-Frank provision that requires companies publicly traded in the United States to disclose annually to the SEC any use of conflict minerals in their supply chains, including minerals originating in the Democratic Republic of the Congo (DRC) and its adjoining countries.

While the NAM supports addressing the atrocities occurring in the DRC, it has underscored that the conflict minerals disclosure requirements pose costly, burdensome and impracticable financial and reporting burdens, and potentially a substantial auditing burden, on NAM members of all sizes—and in all sectors of the manufacturing economy. The NAM strongly supports the repeal of the conflict minerals disclosure requirement in the CHOICE Act.

Manufacturers struggle under an enormous regulatory burden. Indeed, an NAM report released earlier this year found that manufacturers in the United States face 297,696 federal regulations. The NAM supports efforts to reduce this regulatory burden and make businesses in the United States more competitive in the global marketplace and free up additional resources for investment and job creation. Passing the CHOICE Act will help bring us closer to our goal.

Protect Innovation and the Advancement of New Medicines

By | Innovation, intellectual property, Shopfloor Policy | No Comments

Today, the House Energy and Commerce (E&C) Committee will mark up the FDA Reauthorization Act (FDARA) of 2017 (H.R. 2430). To ensure this critical legislation passes Congress far ahead of a September 30 deadline, manufacturers urge swift action by the committee to keep H.R. 2430 on schedule. Any delay of the FDARA risks future gains in medical discovery and harm to our global standing.

In a March letter to E&C Health Subcommittee members, the National Association of Manufacturers (NAM) expressed strong support for a timely reauthorization of the Prescription Drug User Fee Act of 2017.

The FDA’s user fee program is the ultimate publicprivate partnership. If approved, this agreement will help the federal government and pharmaceutical and medical device manufacturers continue to drive innovation and usher in competition to bring new and groundbreaking therapies to patients.

Manufacturers urge members of the E&C Committee to support FDARA and avoid any needless risk to public health by opposing drug importation amendments.  Any amendment that eases restrictions on the importation of medicines is a distraction. The NAM opposed a similar importation effort in the Senate earlier this year in a key vote letter because it could expose consumers to counterfeit and adulterated therapies. The focus must be on the advancement of new medicines and treatments as well as unambiguous support for scientific innovation by ensuring the FDARA moves forward unimpeded.

More Relief for Manufacturers: EPA Grants Flexibility on Ozone Regulations

By | Energy, Environment, Shopfloor Main, Shopfloor Policy | No Comments

This afternoon, the Environmental Protection Agency (EPA) informed governors that the agency will grant states an additional year for initial compliance designations under the 2015 ozone standard. This is welcome regulatory relief for manufacturers, who are working hard to comply with the 2008 and 2015 ozone standards but run the risk of falling into no-grow zonesif their states do not reach the 2015 levels quickly enough.

The 2015 ozone regulation could be one of the most expensive regulations ever issued by the U.S. government. The 2008 standard of 75 parts per billion (ppb)—the most stringent standard ever—was never even fully implemented, while emissions are as low as they have been in decades and air quality continues to improve. The EPA itself admitted that implementation of the previous standard of 75 ppb, when combined with the dozens of other regulations on the books that will reduce ozone precursor emissions from stationary and mobile sources, will drive ozone reductions below 75 ppb (and close to 70 ppb, the current standard set in 2015) by 2025.

Throughout the 2015 ozone rulemaking, hundreds of governors, mayors, local development officials, manufacturers and other leaders warned the EPA that they could not comply with a tighter standard under the strict timelines the EPA requires. Air quality officials from cities and states across the country have testified before Congress that they may run out of controls before they even reach the levels mandated by the EPA. Manufacturers appreciate that the EPA is acknowledging this very real problem.

The EPA also announced it would continue to look into three issues the NAM raised in its comments on the 2015 rule and in subsequent requests to the agency: (1) how the EPA calculates background ozone; (2) the impact of emissions from outside the United States on local ozone levels; and (3) timely consideration of exceptional events designations. Fixing these issues will go a long way toward more flexibility for manufacturers as they continue to reduce their emissions.

ShopTalk Podcast: A Future for Veterans in Manufacturing

By | General, Shopfloor Policy | No Comments

Across the country, Americans are celebrating our veterans and the sacrifice of our military. Thousands of service men and women return home each month, looking to enter the workforce, and with manufacturers seeking to fill a large skills gap, there is a future in manufacturing for veterans.

In the latest ShopTalk podcast episode, NAM Senior Vice President of Communications Erin Streeter talks with retired Colonel John Buckley, military relations manager at Koch Industries, and Amy Thomas, senior director of programs and development at The Manufacturing Institute, about why veterans should consider a manufacturing career.

How Manufacturers Are Making Progress in Washington

By | Media Relations, Shopfloor Main, Shopfloor Policy | No Comments

Three months ago, I joined a group of business leaders in a meeting with President Donald Trump at the White House. We had a frank discussion about what businesses in America need to create jobs, compete around the world and grow our economy.

We focused especially on issues like regulatory reform and infrastructure, and since that meeting, the National Association of Manufacturers (NAM) has continued to provide the administration with manufacturers’ perspectives. We sent a report on regulations to the Commerce Department, and we continue to advocate the solutions found in our “Building to Win” agenda.

I shared a similar message in a round of television interviews in New York this week. On CNBC, NAM President and CEO Jay Timmons and I talked about manufacturers’ priorities with the “Squawk Box” audience (You can watch parts one and two of the interview here and here.)

The other hot topic for manufacturers right now, of course, is tax reform. Earlier this month, I was on Capitol Hill to testify before Congress about manufacturers’ priorities for tax policy. I discussed the principles laid out in “Competing to Win” and urged our elected leaders to act in a bold way. “We operate in a fiercely competitive global economy, and we need a fiercely competitive tax system to win,” I reminded them.

It can get lost in the news, but manufacturers really are making progress on our big-ticket items. We have an administration who is listening to us and has already acted to ease the regulatory burden. On Capitol Hill, Sens. Rob Portman (R-OH) and Heidi Heitkamp (D-ND) have introduced a bipartisan regulatory reform bill. President Trump released his tax reform blueprint, and Congress is holding hearings to begin the process. In addition, the administration is expected to release an infrastructure plan soon, after previously citing our “Building to Win” blueprint favorably.

If we keep up the hard work and keep speaking out, we can seize this opportunity and get real results for manufacturers—and our whole country.

Manufacturers Continue the Infrastructure Call to Action

By | Infrastructure, Shopfloor Policy | No Comments

Infrastructure Week 2017 reached record high levels of participation by doubling both the number of events that occurred in 2016 as well as the number of affiliate members that joined in calling on policymakers to invest in infrastructure now. According to first reports, more than 1,500 people contacted their representatives or senators last week alone. Since May 1, Infrastructure Week made 175 million social media impressions. Our collective voice was loud, and it was heard.

To ensure manufacturers hold President Donald Trump to his commitment to make U.S. infrastructure “second to none,” the call to action must continue from diverse, united stakeholders who recognize that infrastructure is the backbone of a strong manufacturing economy. We need every manufacturing employee and company to engage in this call for infrastructure because our work is not done.

Kathryn Karol is the vice president of global government and corporate affairs for Caterpillar Inc. She stated,

At Caterpillar, we believe that every week should be Infrastructure Week. We are pleased that the president and Congress agree that wise investments in infrastructure must be a national priority. Caterpillar and our customers stand ready to deliver on those investments and make infrastructure an engine for economic growth and job creation in the U.S.”

Please keep the momentum of Infrastructure Week going by using the National Association of Manufacturers’ (NAM) infrastructure toolkit to contact members of Congress with emails, phone calls and meetings. The NAM will continue to push for a comprehensive plan to revitalize the nation’s transportation, energy, water and broadband infrastructure. This week, NAM President and CEO Jay Timmons furthered the NAM call that now is the time to build with a piece published in the Cincinnati Enquirer, titled Time to act on Brent Spence Bridge and nation’s crumbling infrastructure.

During the fifth-annual Infrastructure Week, the NAM, as a steering committee member, led efforts to unite varied voices behind a broad call for infrastructure investment. Transportation Secretary Elaine Chao gave the keynote address at the launch event on Monday, followed by a discussion between Timmons and Laborers’ International Union of North America General President Terry O’Sullivan on how manufacturers depend on infrastructure. C-SPAN covered the event.

Ingersoll-Rand Chairman and CEO and NAM Executive Committee member Michael Lamach represented the NAM in an interview on CNBC. Manitowoc Company President and CEO Barry Pennypacker authored a Shopfloor blog on local infrastructure needs and represented the NAM in a roundtable discussion with congressional leaders, business executives and Department of Transportation special advisers. Also on the NAM Shopfloor blog, Fluor Corporation Chairman and CEO and NAM Board Vice Chair David Seaton explored the benefits of public–private partnerships, and NAM Vice President of Energy and Resources Policy Ross Eisenberg outlined manufacturers’ dependence on robust energy infrastructure. The NAM co-hosted an official Infrastructure Week Congressional Reception on Wednesday, May 17, featuring congressional co-chair Reps. Garret Graves (R-LA) and Sean Patrick Maloney (D-NY).

The Ports of Indiana and American Association of Port Authorities hosted an infrastructure roundtable in Indianapolis that included participation from NAM members Subaru of Indiana, ArcelorMittal and the Indiana Manufacturers Association. The meeting also included federal officials from the U.S. Army Corps of Engineers and the U.S. Department of  Transportation as well as the Indiana Department of Transportation Commissioner. The discussion was about advocating major infrastructure improvements, including the Soo Locks and specifically the Poe Lock in Upper Peninsula Michigan, which every Midwest steel manufacturer relies on. A Shopfloor blog can be found here.

The NAM’s efforts in combination with the efforts of thousands of other Infrastructure Week participants were extraordinary, but we must stay engaged. A comprehensive, pro-manufacturing infrastructure package faces political and philosophical challenges. Despite differences, we must stand united in support of overdue infrastructure revitalization to bolster economic competitiveness here in the United States.

Senate Panel to Focus on Ozone Implementation Challenges

By | Environment, Shopfloor Policy | No Comments

This afternoon, the Senate Environment and Public Works‎ Committee will hold a hearing to examine the implementation of the 2015 Environmental Protection Agency (EPA) ozone standard and to discuss legislation to improve the challenges this new regulation has created for manufacturers. In late 2015, in the face of overwhelming opposition from governors, mayors, economic development councils, transportation authorities and all segments of the industry, the EPA tightened the ozone standard to 70 parts per billion (ppb), down from 75 ppb. This move was certain to place counties across the United States into nonattainment, essentially turning them into no-grow zonesthat businesses typically avoid.

The National Association of Manufacturers (NAM) didnt like the new standard—in fact, we were forced to enlist our own Manufacturers’ Center for Legal Action to litigate the final rule—but if that standard is to stay in place, we certainly need help implementing it. More importantly, we need help now, since the 2015 rules deadlines are still running. For many areas, the pain could start very soon.

For instance, the San Joaquin Valley Air Pollution Control District told a House subcommittee last year that, to reduce ozone, it already has taken such extreme steps as banning residents from using their fireplaces in most winter months and implementing regulations that limit the amount of time lids can be off paint cans. Even with these measures, they will not meet the current ozone standard even if they eliminate emissions from all stationary and area sources, off-road equipment, farm equipment, passenger vehicles and heavy-duty trucks. It’s not just California that has these problems. The Georgia Department of Natural Resources noted in its 2015 comments to the proposed rule that there were no effective control measures left available to the state, beyond those already identified and being implemented, to reduce ozone levels in the Atlanta nonattainment area.

The committee will examine two bills ‎designed to address Ozone implementation issues: the Ozone Standards Implementation Act of 2017 (S. 263) and the ORDEAL Act of 2017 (S. 452). Both would create a more flexible glide path for manufacturers to comply with the 2015 standard, allowing reductions to continue through 2025 without the unnecessary economic pain of ozone nonattainment. Both would also change the five-year review cycle for new standards to a more reasonable 10-year cycle, which is the typical time the agency needs to complete these reviews. S. 263 also takes positive steps to address manufacturers’ permitting challenges as they pertain to ozone standards and requires real examination of the impact of international air pollution on domestic ozone levels.

The NAM looks forward to working with the committee to fix the implementation challenges related to the 2015 ozone standards.

Energy: A Key Component of a Comprehensive Infrastructure Package

By | Infrastructure, Shopfloor Policy | No Comments

The American Society of Civil Engineers’ (ASCE) most recent report card gave our nation’s energy infrastructure a D+ grade, pointing out that most U.S. energy infrastructure predates the 21st century. The ASCE says aging electricity infrastructure contributed to 3,571 total outages in 2015, and oil refineries have been operating at around 90 percent capacity. The future presents even bigger challenges: a changing electric grid, new technologies and new sources of energy and changes to where and how energy is being produced will all require improved infrastructure, and it’s not clear that we can keep up. The ASCE projects the investment gap for energy infrastructure to be $177 billion from 2016 to 2025.

The NAM’s Building to Winblueprint ‎puts forward several recommendations to improve our energy infrastructure. Recommended actions include the following:

  • Reform existing laws and regulations to facilitate a more transparent, streamlined and coordinated regulatory process for the siting and permitting of all energy delivery infrastructure, including oil and natural gas pipelines, energy transport by rail, energy export terminals and interstate electric transmission infrastructure.
  • Promote new energy infrastructure investments as a means of increasing U.S. infrastructure’s resilience to climate change by designing for projected future climate conditions. Regulators should work to more quickly approve smart investments.
  • Examine innovative financing mechanisms for new energy infrastructure to encourage private investment.
  • Coordinate underground infrastructure work for road, water, gas, electric and broadband to yield construction savings and reduce traffic disruptions from construction work.
  • Invest in regions without a developed pipeline network to bring down home heating costs in places like New England and make manufacturers more competitive.

‎The National Association of Manufacturers has been encouraged that lawmakers are focusing on energy as a key component of a broader infrastructure package. We’ll be at the table working to drive solutions that make manufacturers more competitive.

Yes, Indiana Has a Port System

By | Infrastructure, Shopfloor Policy | No Comments

From the crossroads of America, Indiana Ports and the American Association of Port Authorities (AAPA) hosted an important session with manufacturers, truckers, engineering firms and thought leaders as well as state and local officials about maximizing infrastructure investments and strategically positioning and advocating infrastructure in ongoing national debates.

Indiana is a top manufacturing state in the nation representing the highest manufacturing employment in the United States17 percent of the Hoosier workforce. With manufacturing well represented in Indiana’s economic footprint, investment in roads, rails, Burns Harbor on Lake Michigan and two inland ports on the Ohio River could not be more important. Fifty-seven percent of the state’s border is water.

Due to complex supply chains of manufacturers and just-in-time inventory principles, leading manufacturers like ArcelorMittal and Subaru of Indiana need Indiana infrastructure to perform and to perform second to none. The good news is that the state has made significant investments, raised revenues and supported projects that the business community needs to keep competitive. It has a vibrant supply of rail, trucking and waterway services. But these sectors do not operate in isolation.

The challenge, however, remains projects of regional and national significance that make a system-wide impact on the movement of critical materials and goods throughout the country and world. In Indianapolis, roundtable participants raised the genuine concern about the long-term condition of the Soo Lock System and especially the Poe Lock in Michigan. The current Poe Lock was built in 1969 and is at risk of failure. It handles more than 90 percent of U.S.-flag vessel cargo passing between Lake Superior and the lower Great Lakes, including more than 40 million tons of iron ore and coal destined for steel mills.

The status quo of the Poe Lock and the aging locks on the inland waterway system is a threat to manufacturing because a catastrophic failure will harm the economy and jobs. According to a 2015 U.S. Department of Homeland Security report, an unanticipated six-month closure of the Poe Lock would likely result in widespread bankruptcies and dislocations throughout the economy. More than 10 million people in the United States and 2 million to 5 million more in Canada and Mexico would lose their jobs. North American economies would enter a severe recession. The U.S. recession impacts would be concentrated in the Great Lakes region, though California and Texas would experience some of the largest job losses. Entire manufacturing industries would be debilitated, including automobiles; appliances; construction, farming and mining equipment; and railcars and locomotives.

Indiana and others states are competing against industrial behemoths like China, Japan and Germany. Competition between states will always be around, but the focus on edging out the international competition is even more acute. These competitors do not even think twice about robustly investing in infrastructure to support industry. Productivity growth in the United States is central to expanding the U.S. economy, and while it’s bigger than one industry or one state, more efficient transportation and infrastructure systems are necessary to create an environment that fosters increased productivity. The Infrastructure Week message to the president, House of Representatives and the Senate: #TimeToBuild is vital now. The NAM has produced an infrastructure toolkit to provide manufacturers the resources to amplify this Infrastructure Week message.