Posts for February 12, 2010

BUSY WEEK AT THE CAPITOL

February 12, 2010 – “UMA on the Hill”

The third week of the 2010 General Session has been a very busy one for the bills UMA is concerned with. Nothing earth shaking but a bunch of minor issues have been moved along in the process and some defeated in committee.

Heard on the Hill earlier this week was: “How is the session going for you so far?” “The session begins on the 16th, that’s when the revenue numbers come out,” was the response. It could not have been more succinctly stated. Everything before that is just practice. When the revenue numbers are known the train will leave the station and every lawmaker with a bill with a fiscal note will know whether they are on the train or switched in the yard.

Advanced this week are issues including:

• Unemployment insurance amendments (HB-18) to re-define the base period to include all of the past four quarters was passed by the Senate Business and Labor Committee. This change will bring $20 million from Washington to bolster Utah’s UI Trust fund. An amendment added to the bill in the Senate committee before passing it out to the full Senate makes it clear that in the future when federal funds are exhausted and it begins to drain the trust fund contributed by employers, the legislature should consider repealing it.
  
• A second UI bill (SB-115) that would have made UI benefits available to unemployed workers who are seeking only part-time work can qualify for benefits. UMA opposed this measure because it would add more burden to an already struggling trust fund and to employers. The bill failed in the committee along party lines.
  
• A repeal of the restaurant tax (1% sales tax on all prepared food in restaurants) failed in committee 6-9. In its original form HB-48 would have shifted the burden of the 1% restaurant tax to all taxpayers in the form of a one tenth of one percent on all other taxable sales. UMA opposed the original bill because of the tax shift and tax increase to business. When the bill was substituted to just repeal the restaurant tax as the bonds against the anticipated revenue are satisfied, UMA changed their position to a neutral position. The bill dies in committee now.
  
• The first of a number of efforts to increase the tobacco tax to help balance the budget was approved in a House committee on Friday morning, but not before proponents of HB-196 increased the level of the tax from the 65 cents per pack the sponsor was seeking to $1.70 per pack. The bill will now go to the House to be considered and take its place among the bills designed to help balance the budget when the level of funding is known (February 16). UMA would prefer to balance the budget without tax increases but recognizes there may be a need to adjust tax revenues before the March 11 final day of the session if revenues for the third quarter do not improve the deficit situation.
  
• Bio-Prospecting, a new term being used by scientists at USU, was brought to the forefront in a Senate Committee this week to ensure the value of micro organisms in and around the Great Salt Lake are the property of the state and that any royalties from those organisms inure the benefit of the State of Utah. UMA was not involved in this bill until UMA president Tom Bingham heard the discussion in committee and recognized that manufacturers with permits to harvest minerals from the Great Salt Lake may inadvertently be guilty of illegally harvesting protected micro organisms. At UMA’s request the sponsor amended the bill to exclude those who have a permit to extract from the lake from the definition of those engaged in bio-prospecting. SB-51 then passed the committee.
  
• An unlikely topic for the Utah Manufacturers Association was the topic of lengthy and heated debate in two separate House committees late Friday, Public Access to Private Stream Beds, HB-80 and HB-141. Both bills are in response to a Utah Supreme Court decision in 2008 that declared that the public has a right to enter private property for recreational purposes as long as they can do it in or adjacent to a stream. Efforts in 2009 to resolve the issue were unsuccessful and it is now back and being addressed from two very different perspectives. HB-80 seeks to codify the Supreme Court decision and clarify under what conditions the public can enter such properties. HB-115 takes the position of private property owners to recognize private property and require permission before entering. UMA was not intending to be involved in this water and private property battle until a member of the legislative committee who is an environmental attorney raised an issue with not being able to keep the public out of private property and its effect on air quality monitoring required for securing an air permit. Permit holders are required to monitor air quality at the property fence. However, if the public is allowed enter a streambed the property line changes to be where the public can travel and may substantially change where air quality has to be maintained by a permit. UMA testified in the HB-80 hearing warning legislators that this environmental issue could be a problem for industry. HB-141 adequately addresses this issue. Unless amended, UMA opposes HB-80 but is neutral on HB-141. Both bills passed their respective committees to be heard on the House floor.
  
• Appropriations Committees attempted to finalize their recommendations to the Executive Appropriations Committee this week. Of concern to UMA are proposed cuts to the Department of Environmental Quality that could jeopardize “primacy” for environmental programs in Utah or that could leave DEQ short of manpower to approve air, water, hazardous waste or radiation control permits in a timely fashion. Many UMA member companies are concerned that cuts that go too deep may leave them wanting for permits to continue to produce of expand into new areas. Some members of the UMA Environmental Committee will meet on Tuesday, February 16 to consider possible solutions to the funding issues for DEQ.
  
• The pace really picks up from here on when the budget gets settled and lawmakers cease their budget hearings and focus on new legislation. Tighten your cinch, it could be a wild ride.

UTAH RECOGNIZED AS BEST IN THE NATION FOR DEBT MANAGEMENT

February 12, 2010 – Forbes

Over the past several years Utah has regularly been recognized as a “best place for business”, “best managed” or “happiest” state in the nation. Now Forbes magazine has published a ranking that may shed a new light on one of the key reasons Utah enjoys these accolades; debt or the relative lack of it! Among all 50 States, Utah came out first in its prudent handling of debt.
View Full Article at the following link http://utahbusiness.com/issues/articles/9303/2010/02/utah_recognized_as_best_in_the_nation_for_debt_management?from=c9508f1ad7192bf3948f06a2b7bfa048778fbbda

UTAH NUMBER ONE IN FISCAL RESPONSIBILITY – PUT IT IN PERSPECTIVE

February 12, 2010 – California Manufacturing and Technology Association

While Utah’s legislature struggles with an $80 million deficit, California faces a nearly $20 Billion deficit, more than twice the size of Utah’s entire budget.

To put the budget balancing issue in perspective, the California Senate Budget and Fiscal Review Committee this week approved a series of proposals to address their deficit. However, it solves less than a third of the overall state deficit of $19.9 billion, however supporters claim it addresses the short-term deficit, thus eliminating state cash concerns without having to make significant sacrifices to education and social services.

The nearly $6 billion solution includes:
• Fuel Tax Swap: Eliminates the state’s sales tax on gas, replacing it for an excise tax on those fuels. The proposal is similar to one proposed by the Governor in his January budget, however the tax on diesel would remain. Additionally, the Democrat plan would give local governments the ability to approve fee hikes on gasoline to pay for transit projects. (Pending)

• Independent Contractor Withholding: The state would require businesses and governments to withhold 3 percent of payments to independent contractors in the state. This burdensome proposal to California employers is estimated by the state to bring in $1.4 billion; however most of those revenues are accelerations of already anticipated revenues. (Pending)

• Financial Institution Record Match: Requires financial institutions to share account information on delinquent taxpayers to facilitate collection by the state. (Approved)

• Abusive Tax Shelter Definition: Tightens up the definition of what constitutes an “abusive” tax shelter. (Approved)

• Internet Sales/Nexus: Revises nexus standards to compel internet sellers to collect sales tax. (Approved)

• Emergency Response Initiative: Levies a 4.8 percent surcharge on insurance policy premiums statewide and uses the revenue to support emergency response activities at the Department of Forestry and Fire Protection, the California Emergency Management Agency, and the California Military Department. (Pending)

• State Prisons: Cuts the state prisons’ health care budget by $811 million and proposes to save $200 million by commuting sentences for illegal immigrant prisoners. (Approved)• State Worker Payroll Cap: Requires State Departments to cut five percent from employee costs through payroll. (Approved)

The Committee is scheduled to meet again next week to consider the remaining items, with a Senate Floor vote anticipated sometime later in the week.

Is it any wonder California has lost more than a third of their manufacturers in the past seven years. They have gone from the number one manufacturing state in the nation to one that is losing companies so fast they can hardly track it. Isn’t it great to live and manufacture in Utah?

SUBSTANCE OR SHOW TIME?

February 12, 2010 – National Association of Manufacturers

The President’s latest announcement of a publicly televised, bipartisan health care summit scheduled for February 25 has Republicans questioning the intent and Democrats polishing the details of their House-Senate hybrid bill many believe will become the basis for the discussion. While earlier statements indicated the Administration has no intention to “start over” – as Republicans have routinely requested -- comments from this week’s initial pre-summit bipartisan discussion indicate otherwise, with President Obama stating that he isn’t wed to any specific health care bills in the House or Senate. That said, many are questioning the sincerity of this bipartisan discussion as House Democrats continue to prepare for reconciliation.

Senate

This week’s bipartisan discussion was intended to be a dress rehearsal for the upcoming health care summit, though the conversation extended well beyond health care reform. According to Senate Minority Leader McConnell (R-KY), Republicans discussed other potential areas of agreement with the Administration, such as support for nuclear power, offshore drilling, clean coal technology and action on pending trade agreements; however, there appeared to be little consensus on the strategy to address the Administration’s top priorities – namely the development of a debt commission and a jobs package. With regard to the upcoming summit, Senate Republicans remain concerned that the President has no intention of considering GOP health care proposals but instead might be inclined to use the nationally televised summit to burnish his bipartisan credentials and paint the GOP as obstructionist.

House

Several sources indicate that House Democrats are still poised to use reconciliation to pass a bill pre-Easter recess, noting that the President would sign the Senate-passed bill and later a reconciliation bill that trumps the Senate package. Of course, the Senate bill would still need to pass the House first, and the two chambers still need to agree on the ingredients for a reconciliation package – details that have not been flushed out. Meanwhile, House Republicans have publicly displayed their dire concerns over the upcoming health summit and, among other things, have urged the Administration to consider “starting fresh” and to include state legislators and governors in the summit discussions.

Administration

The President’s call for a bipartisan summit is likely linked to the recent Gallup poll approval rating results of 36 percent for his management of health care – the lowest of his Administration. Lawmakers have implored Obama to weigh in on a legislative strategy to move reform forward, but his sagging numbers indicate that any political cover may be thin.

SENATE DEMS FAVOR NEW JOBS BILL

February 12, 2010 – Late Wire from Washington.net

Democrats scrapped bipartisan jobs bill in favor of one they say is leaner and focused solely on putting Americans back to work ... continue at this link http://www.manufacturing.net/article.aspx?id=241456&wnnvz=1750,01295739463

Prospects for job creation legislation remains unclear since Senate Majority Leader Reid tossed out a bipartisan jobs bill agreement backed by the White House and replaced it with a simpler measure written without Republican input.

RETAIL SALES PERFORM BETTER THAN EXPECTED IN JANUARY

February 12, 2010 – Today in Manufacturing.net

Commerce Department said retail sales increased by 0.5 percent last month, the best showing since November and better than 0.3 percent increase expected... continue at this link http://www.manufacturing.net/article.aspx?id=241370&wnnvz=1750,01295263617

BUSINESSES TRIM INVENTORIES IN DECEMBER

February 12, 2010 – Today in Manufacturing.net

Commerce Department said businesses trimmed stockpiles by 0.2 percent in December, weaker performance than 0.2 percent gain that economists expected... continue at this link http://www.manufacturing.net/article.aspx?id=241378&wnnvz=1750,01295263617

UMA MEMBERSHIP MEETING POWER POINT AVAILABLE

February 12, 2010

The very interesting and informative power point presentation by Executive Vice President of the American Foundry Society Raymond Monroe delivered as a key note address at the February 1, 2010, UMA Annual Membership meeting is available for UMA members upon request. Please contact Teresa Thomas at Teresa@umaweb.org or 801-363-3885 to request a copy.

We have received numerous requests for the information outlining the importance of manufacturing to the U.S. and Utah Economy. We are pleased to provide a copy of the power point.

CALLING FOR UTAH COMPANIES 50 YEARS OR OLDER

February 12, 2010 – Utah Business Magazine

Has your company lasted the test of time? Has it paved the way for other companies in its industry? Utah Business magazine is looking for companies and organizations 50 years and older to honor in our annual Trailblazers program.
View Full Article at this link http://utahbusiness.com/issues/articles/9299/2010/02/calling_for_utah_companies_50_years_or_older?from=c9508f1ad7192bf3948f06a2b7bfa048778fbbda

EPA ENDANGERMENT FINDING – UMA TO FILE DETAILED COMMENTS

February 12, 2010

In December 2009, the Environmental Protection Agency (EPA) made its formal “endangerment finding” for greenhouse gas (GHG) emissions and closed the comment period for first time rules on GHG emissions from industrial sources, through its so-called “tailoring rule.”

The so-called “tailoring rule” would vastly expand the permitting requirements for large and small manufacturers driving up cost and delaying capital expenditures and jobs. This rule is unprecedented in its reach and scope and will greatly impact manufacturer’s ability to compete globally.

Nearly 1000 manufacturers have already signed a petition urging EPA not to impose new mandates on the industrial sector. In addition to hearing from manufacturers, 30 states also weighed in with EPA, urging federal regulators to exercise caution before imposing new rules on “stationary sources” through the tailoring rule.