PARSONS BEHLE & LATIMER LAWYERS NAMED BEST LAWYERS OF THE YEAR (Parsons Behle and Latimer is a long-time UMA member and a great help in legal and political matters)
Daily Pulse
Six Parsons Behle & Latimer lawyers have been named 2011 Lawyers of the Year by Best Lawyers in America. J. Thomas Beckett is the Salt Lake City Bankruptcy and Creditor-Debtor Rights Lawyer of the Year; Randy M. Grimshaw is the Salt Lake City Tax Lawyer of the Year; Stephen J. Hull is the Salt Lake City Mining Lawyer of the Year; Dallin W. Jensen is the Salt Lake City Water Lawyer of the Year; Hal J. Pos is the Salt Lake City Environmental Lawyer of the Year and Michael A. Worel is the Salt Lake City Medical Malpractice Lawyer of the Year.
Best Lawyers in America is designates one lawyer in each practice area in each community as Lawyer of the Year. Best Lawyers compiles its lists of outstanding attorneys by conducting peer-review surveys in which thousands of leading lawyers evaluate their peers.
FIRST WIND MARKS THE START OF CONSTRUCTION ON MILFORD II PROJECT
(First Wind is a new UMA member and a great addition from the Southern Region)
First Wind Release - Aaron Lindenbaum, Contributor
(Milford, UT) - First Wind, an independent U.S.-based wind energy company, held a ceremony to commemorate the start of construction of the 102 MW expansion of the company’s Utah-based Milford Wind project Wednesday. As part of the ceremony, local and community leaders joined First Wind at the project site in Milford, Utah to recognize the economic and environmental benefits of the project along with the significance of recent project milestones that include a long-term power purchase agreement (PPA) and construction financing, both of which were critical in spurring the current construction activity.
Milford Mayor Bryan Sherwood and Millard County Commission Chair Daron Smith joined with First Wind officials and others in signing their names to a turbine blade that will be erected on the wind project.
The Milford Wind Phase II Project will have the capacity to generate up to 102 MW of clean energy upon its completion, enough to power about 22,000 homes. Located in Millard and Beaver County, Utah, the construction associated with the installation of 68 additional 1.5 MW GE turbines for the second phase of the project began in July, with foundations being poured in October.
The construction will be a source of revenue and new jobs to the surrounding area. For example, the 204 MW Milford I project, which went online in November 2009, supported more than 300 development and construction jobs, and First Wind directly spent about $30 million with Utah-based businesses developing and building the first phase of the project and another $50 million in statewide spending on items such as wages, taxes and more.
“We are very pleased to accelerate our construction activities for the second phase of the Milford Wind project,” said David Hastings, Vice President of Western Development for First Wind. “The expansion and continued success of Milford Wind is a testament to the project and the commitm ent of our stakeholders, the State of Utah, our host counties of Beaver and Millard, our PPA partners – SCPPA, LADWP and Glendale, our landowner group including the federal Bureau of Land Management, our contractor and subcontractors, and of course our lenders.”
RMT, which led the construction for the Milford I project and is currently building First Wind’s Kahuku project in Oahu, Hawaii and the Sheffield Wind project in Vermont, is again leading construction activities for the Milford II project.
“We are pleased to continue our partnership with First Wind to expand the Milford Wind project,” said Frank Greb, Vice President and General Manager for RMT. “As with the first phase of the project, RMT will hire local workers and subcontractors whenever possible to ensure that the construction of this expansion maximizes the economic benefits for the surrounding community and Utah.”
Power Purchase Agreement with SCPPA
Completed on October 18, 2010, the long-term power purchase agreement (PPA) to supply the cities of Los Angeles and Glendale with renewable energy represented a significant milestone for the Milford II project. Once completed, the second phase of the Milford Wind project will add to the already significant renewable energy that is being produced and delivered to Los Angeles, Burbank and Pasadena through the first phase of the project. The 102 MW expansion will utilize the 88-mile generator lead that was built from the Milford Wind project to the Intermountain Power Plant in Delta, which then connects the site to the electrical grid.
“This PPA for Milford II is significant as it builds on the successful long-term PPA we signed in 2007 for Milford I, which at its time was a landmark for a publicly owned utility,” said Bill D. Carnahan, Executive Director of the Southern California Public Power Authority (SCPPA). “As with the Milford I PPA, SCPPA will contract with First Wind for the long-term agreement, prepay for the energy, and sign power sales agreements with the participants to sell them the output of the project to repay SCPPA’s costs including the ongoing operating expenses.”
Project Financing
In addition to the PPA, First Wind recently secured financing for the project. RBS Securities Inc. was lead arranger and bookrunner for this loan. The following banks acted as joint lead arrangers for the financing: Banco Espirito Santo S.A. New York Branch, Santander Investment Securities Inc., CoBank, ACB, and SG Americas Securities, LLC.
“The commitment from these banks is evidence of both the strength of this project and the promise of the wind industry,” said Steve Schauer, Senior Vice President of Finance for First Wind. “We sincerely appreciate their commitment to both the Milford I and now the Milford II projects and to renewable energy. We look forward to building our relationsh ip with each of them.”
“RBS is very pleased to have played a leading role in First Wind’s financing of the Milford II project,” said Richard Randall, RBS Managing Director. “We applaud First Wind’s dedication and the Joint Lead Arrangers’ commitment in successfully closing this financing. The financing of the Milford II project, following the success of the first Milford project last year demonstrates the tremendous vision of the Milford Wind project and First Wind to bring low cost renewable power to southern California.”
When completed, the combined phases of the Milford Wind project will have the capacity to generate enough to power the equivalent of more than 65,000 homes annually. With an aggregate of 306 MW of clean, wind energy between the two projects, the power produced by Milford Wind will be the equivalent of decreasing carbon dioxide emissions by over 310,000 tons annually, according to the Environmental Protection Agency s (U.S. EPA) Emissions and Generation Resource Integrated Database (E-GRID).
First Wind is an independent wind energy company exclusively focused on the development, financing, construction, ownership and operation of utility-scale wind projects in the United States. Based in Boston, First Wind has wind projects in the Northeast, the West and in Hawaii, with the capacity to generate up to 504 megawatts of power and projects under construction with the capacity to generate up to an additional 232 megawatts. For more information go to First Wind.
Air Permitting Lean/Six Sigma Evaluation Project Charter
Utah Department kicked off its second Business Process Improvement Project earlier this week after wrapping up the details for implementation of the first project focused on the Division of Radiation Control within DEQ. UMA has been intricately involved in this first project and was one of the initial promoters of the effort. Similarly, UMA helped promote moving this lean process to the next level which will focus on DAQ where added responsibilities coming from mandates from EPA threaten to bury this already overburdened Division. We are pleased to see this next project begin and are pleased that several UMA member company representatives have been seated on both the Project Team and the Steering Committee. UMA president Tom Bingham has been named to the steering committee and has provided recommendations to the Project Leader for qualified industry professionals to assist in the process.
Project Name: Lean/Six Sigma Evaluation of the Division of Air Quality New Source Review (NSR) Permitting Process.
Date: November 2010
Authority/Scope: An evaluation of the current process used to evaluate and review NSR permit applications (Notices of Intent) and to issue NSR permits (Approval Orders), under the Division of Air Quality rules.
Sponsor and Steering Team (who has ultimate responsibility and key stakeholders): UMA recommended participants are underlined below.
Amanda Smith, Brad Johnson, Ernie Wessman, Kathy Van Dame, Steve Sands, Denise Chancellor, Lowell Braxton, Senator Kevin Van Tassle, Senator Ralph Okerlund, Representative Wayne Harper, Representative Ronda Menlove, Representative Roger Barrus, Mark Bleazard, Brian Allred, Tom Bingham, Lee Peacock, Jim Holtkamp, David Mills, Joro Walker, Senator Scott Jenkins, Senator Pat Jones, Senator Daniel Liljenquest,
Sponsor: Cheryl Heying
Project Team: Marty Gray, Tim Andrus, Alan Humpherys, Heather Mickelson, Camron Harry, John Jenks, Rusty Ruby, Teri Weiss, Renette Anderson, William Andes, David Beatty, Tad Anderson, Jason Krebs, Chris Stephens, Don Verbica, Therron Blatter, Bill Lawson, Kerry Rubelmann, Chris Kaiser, Mike Keller, and Mike Astin
Project Leader: Regg Olsen
Background and Business Case (why this is important and worth the investment):
The Division of Air Quality (and its predecessor organizations) has been issuing Approval Orders (air permits) since November 1969. This permitting authority comes from Utah Statute (UCA 19-2-104, 19-2-107, 19-2-108) and applies to all new and existing sources of air pollution.
In addition, the Environmental Protection Agency has given the State of Utah authority to implement the New Source Review (NSR) permitting program outlined in §110(a)(2)(C), §165 and §173 of the federal Clean Air Act.
The effectiveness of the program has been reviewed and analyzed in the past and improvements have been made. However, it is recognized that a periodic review of the process is helpful and necessary in order to maintain a high level of effectiveness. The timeliness and effectiveness of the DAQ’s NSR permitting process is a key element in helping the state maintain its economic edge as new and existing industries seek to build or expand their operations. The process of issuing NSR permits must be documented such that stakeholders understand the process. It is also important to establish associated measures for success. This project will provide the baseline for identifying opportunities for process improvement. The analysis of the regulatory process baseline will also serve as the starting point for 1) a determination of optimal staffing, 2) a determination of optimal timelines for permit issuance, 3) an opportunity to optimize how information flows, 4) the development of a method to measure the success of the NSR program and 5) the development of a method to evaluate the implementation efforts (of the decisions from the project).
Objectives & Deliverables:
- Identify current process steps in reviewing and issuing Approval Orders.
- Identify process improvement opportunities by identifying logjams, bottlenecks or other inefficiencies.
- Identify meaningful methods for measuring success.
- Establish optimum staffing to accomplish the NSR permitting responsibility.
- Align management and staff expectations on permit organization and content.
- Identify best practices for properly preparing for potential litigation.
- Identify permitting or rule gaps/ambiguities.
- Identify the expectations of the regulated community for NSR permitting.
Reporting Requirements: The project team will report their data, analysis and recommendations from the Kaizen working session to the steering committee at the conclusion of the Kaizen event. The team will also report at other times as necessary on their progress and needed decisions.
Timeline: The identification of process changes that are needed will be completed by January 31, 2011. The remaining deliverables will be completed by June 30, 2011.
SENATOR STEPHENSON INTRODUCES EXPANSION OF SALES TAX EXEMPTION FOR MANUFACTURING
In an abbreviated interim session on November 17, the interim committee on revenue and taxation rushed to hear issues being considered for action in the 2011 General Session of the Utah Legislature before going into a Special Session called by the Governor. This was the final interim committee session before the general session.
Among the proposals introduced was Senator Stephenson’s expansion of the sales tax exemption for petroleum refineries from the current three year useful life to a full exemption for refinery-related “machinery and equipment not currently exempt (less than three year useful life), and consumables.” There is no bill drafted, so any action on this proposal would have to be introduced in the 2011 General Session and will not carry the designation of a “committee bill”.
The Tax Commission estimates the fiscal note to the state for this proposal would be between $3 and $4 million.
According to Senator Stephenson, this is an effort to make refineries in Utah more competitive and to encourage additional investment. This is also a response to some legislators who have continually complained that they believe fuel prices in Utah are artificially high compared to surrounding states and the nation. This proposal may offset efforts to tax refineries in an attempt to drive down consumer prices for motor fuel.
UMA is evaluating this proposal as another incremental step in moving toward our ultimate goal of removing sales tax from all inputs to production and only tax outputs.
UMA SUPPORTS ENTERPRISE ZONE AMENDMENTS
UMA is lending its support to a bill presented by Representative Kraig Powell in the Workforce Service Interim Committee on November 17. Enterprise zones in Utah are reserved for rural areas of the state, according to Representative Powell, who represents Duchesne and Uintah Counties in the House of Representatives. He noted that there is considerable confusion not only at the local level with cities, towns and counties, but also with the Utah Tax Commission as to who is eligible to apply for tax advantages in an enterprise zone.
Powell’s bill will clarify the provisions and make it clear who can apply and receive tax help in rural areas of the state. Many of the recipients of this tax help are manufacturers who are disadvantaged by location away from population centers in Utah.
UMA was key in establishing enterprise zones and continues to support their creation and the work they do in rural Utah.
DISTRIBUTION GROWTH OPPORTUNITIES FOR 2011
Quick Manufacturing News
While supply chain tracking systems and logistics networks are getting better at supporting production sites in regions offering lower labor costs, the extra distance and the challenges of delivering parts for servicing production often compromise supply chain predictability. Click to continue
GM LAUNCHES LARGEST STOCK OFFERING IN HISTORY
Quick Manufacturing News
U.S. taxpayers will see $11.7 billion from IPO Click to continue
IF YOU DON'T MEASURE, YOU CAN'T MEASURE UP
Quick Manufacturing News
"If it's true that you can't manage what you don't measure, there are plenty of supply chain managers who aren't living up to their titles. According to a Next Generation Manufacturing study, fewer than half of companies at or near world class in supply chain management (45%) have a high-level measurement regimen..." Click to continue
SENATE DEFEATS PAYCHECK FAIRNESS ACT
Yesterday in “lame duck” session of Congress, Senate Republicans refused to support a measure to consider the Paycheck Fairness Act, which would require employers to prove that any disparities in wages are job-related and not sex-based. The defeat came after business groups said, led by NAM said the measure backed by the Obama administration was a jobs killer. The National Association of Manufacturers and the US Chamber of Commerce were among a host of business and industry groups who delivered the strong message to the U.S. Senate.
“Utah Manufacturers Association signed on this measure early in the process and continued to urge the Utah delegation to vigorously oppose this ill-advised measure, said UMA President Tom Bingham.”
“This was a tough vote for many due to the sound-bite appeal of the bill's title, but in the end they did the right thing and voted for jobs,” Keith Smith, director of employment and labor policy at NAM, said in an e-mailed statement. “It is difficult to imagine a scenario in which this bill would not have led to lower wages and fewer jobs,” he concluded. This was a key vote measure for NAM and the letter sent to all Senators made it very clear this vote would be recorded and published.
CHINA'S STUBBORNNESS COULD MAKE INFLATION WORSE
Today in Manufacturing
After announcing steps to curb surging food prices that are stoking public anger, China's leaders face the challenge of curbing simmering inflation pressures throughout the economy without derailing its recovery ... continue
STUXNET VIRUS A THREAT TO MANY INDUSTRIES
Today in Manufacturing
A malicious computer attack that appears to target Iran's nuclear plants can be modified to wreak havoc on industrial control systems around the world ... continue
TIME FOR CONGRESS TO EXTEND LOW TAX RATES
NAM Capital Briefing
Members of the 111th Congress returned to Washington on November 15 to begin the lame-duck session and finish any remaining work before the 112th Congress commences in January. The results of this month’s mid-term elections demonstrate that the American people want Congress to focus on jobs and the economy. One of the best things Congress can do to provide certainty to manufacturers and help them begin hiring is to extend the 2001 and 2003 low tax rates on individuals and small businesses.
Congress is divided on the issue, and it is unclear if senators and representatives will be able to reach a compromise during the lame-duck session. Some are calling for a permanent extension of the tax rates. Congressman John Boehner (R-OH), the next speaker of the House, said, “I think that extending all of the current tax rates and making them permanent will reduce the uncertainty in America and help small businesses to create jobs again.”
Some others are seeking a temporary one- or two-year extension to spark the struggling economy. One of President Obama’s senior advisors recently announced that the President has ruled out a permanent extension of these low tax rates but could be willing to compromise on the temporary extension.
The pending expiration of the 2001 and 2003 tax rates on January 1, 2011, would mean major tax increases on thousands of small manufacturers – S-corporations and other pass-through entities – that file their business taxes at the individual rate. Under the President’s plan, the top marginal rate for many of these employers could jump from 35 to 39.6 percent.
About 73 percent of all manufacturers are organized as S-corporations or other flow-through entities, and they will be disproportionately impacted by the looming tax increases. Without congressional action:
- The top two marginal tax rates will revert to 2001 levels, leaving some manufacturers to face a tax rate of nearly 40 percent.
- Capital gains taxes will increase to 20 percent from the current 15 percent.
- Dividend tax rates will nearly triple to 39.6 percent from the current rate of 15 percent.
- The estate tax will rise from 0 to a job-killing 55 percent with a $1 million exemption.
Some in Congress have suggested raising other taxes on businesses to offset any temporary or permanent extension of the 2001 and 2003 tax rates. The NAM opposes business tax increases that would only add to the economic uncertainty and continue to limit manufacturers’ ability to create jobs and compete in the global marketplace.
The NAM, along with more than a dozen concerned business associations, sent a letter to Congress opposing this move. The letter stated, “Given the urgent need for new private sector jobs, adding to the tax burden would only undermine vital economic recovery efforts now underway throughout the country.” In addition, Congress should only advance “proposals that would create greater certainty and stability for the private sector to eliminate disincentives for job creation and investment.”
The lame-duck session also gives Congress its last chance to extend a number of important tax incentives that expired on January 1, 2010. These tax provisions, which include the research and development (R&D) tax credit, have broad, bipartisan support. Failing to extend the provisions will lead to additional job losses and create more uncertainty. The NAM participated in a business group advertisement in Roll Call urging Congress to extend these incentives.
NAM President John Engler, in a Wall Street Journal op-ed on November 17, emphasized that President Obama has a choice to make. “If Mr. Obama wants to help families, businesses and the recovery, then his course of action is clear: He should support the full extension of the 2001 and 2003 personal income tax rates that are now set to expire at the end of this year.” Permanent, lower individual tax rates are needed to revitalize the U.S. economy. Raising taxes will hurt manufacturers and destroy jobs. Contact your representatives and senators and tell them to oppose these job-killing tax increases.
EPA ISSUES GUIDANCE ON EMISSIONS.
NAM Capital Briefing
Last week, the Environmental Protection Agency (EPA) released guidance on implementing the Prevention of Significant Deterioration (PSD) and Title V Operating Permit Programs for greenhouse gas emissions (GHG) from stationary sources. The document also included technical resources to assist state and federal permitting authorities in identifying control measures for GHG emissions (i.e. energy-efficiency measures, carbon capture and sequestration and fuel-switching). Manufacturers are concerned that the EPA’s guidance leaves many questions unanswered. As a result, industry and federal and state authorities will likely be unprepared for new permitting requirements. The NAM, in conjunction with the Air Quality Task Force, is drafting comments on the proposal, which are due by December 1.
TAX ISSUES IN LAME-DUCK SESSION WILL IMPACT SMALL MANUFACTURERS.
NAM Capital Briefing
Small and medium manufacturers are paying close attention to the lame-duck session of the 111th Congress. These businesses face a looming crisis on January 1, 2011, when substantial tax increases will take effect unless Congress acts to extend the 2001 and 2003 tax relief that has been vital for these companies.
Seventy-three percent of all manufacturers are organized as S-corporations and other entities paying taxes at the individual rate, and they have struggled through the crippling recession by making difficult cuts in wages, expenses and hours. Uncertainty continues to limit their ability to hire, invest and compete, and the primary factor driving that uncertainty is the possibility of tax increases from Washington.
The expiration of these tax rates amounts to a tax increase on small businesses, and the companies that are expected to hire more workers will be hurt the most. Moreover, their employees, who could face downsizing, pay freezes or reduced work opportunities, will be harmed just as much.
The tax cuts enacted with bipartisan support in 2001 and 2003 worked, and allowing them to expire is precisely the wrong message to send to America’s job creators. Employers are already delaying hiring decisions, reducing investments and making other cuts to help manage the rising costs associated with the tax increases. Congress must extend the low tax rates before the end of the year.
Contact your senators and members of Congress and tell them to oppose these job-destroying tax increases.
NAM QUESTIONS EEOC ENFORCEMENT TACTICS.
NAM Capital Briefing
The NAM and other groups filed an amicus brief November 10 urging the Eighth Circuit to overturn a trial court ruling that authorized the Equal Employment Opportunity Commission (EEOC) to enforce an administrative subpoena that was not based on a valid charge of discrimination, and that broadly sought information that was not relevant to the charging party’s claims. A single employee’s complaint about sexual harassment and retaliation does not support the EEOC’s broadening the case to a charge of class-wide discrimination, without a “clear and concise statement of the facts” constituting the alleged violation, according to the NAM’s brief. Otherwise, the EEOC would be able to conduct an open-ended audit of all of the company’s employment practices, in violation of statutory language designed to prevent the exercise of unconstrained investigative authority.
GOP BLOCKS BILL TO EXTEND JOBLESS BENEFITS
Today in Manufacturing
Republicans in the House Thursday blocked a bill that would have extended jobless benefits for the long-term unemployed beyond the holiday season ... continue
JOBLESS CLAIMS RISE BUT OFFER HOPE
Today in Manufacturing
Number of people applying for unemployment benefits barely rose last week, offering some hope that the job market may be improving ... continue
LAME DUCK SESSION – SOME SUCCESSES MUCH STILL LEFT TO DO
- Session timing: The first lame duck session started on Nov. 15, and will likely continue through Nov. 19. A second session will resume after the holiday break, starting Nov. 29.
- Legislation of note Congress has addressed so far:
- The misnamed Paycheck Fairness Act (S. 3772) failed yesterday by only two votes.
- FDA Food Safety Modernization Act (S. 510) passed in committee and awaits Senate floor vote.
- The Senate GOP Caucus two-year moratorium on earmarks was approved.
- Legislation likely to be addressed: a continuing resolution to fund most government operations at current levels (Congress has until December 3); and new legislation to repeal the onerous 1099 requirement in the new health care law
- Legislation in limbo: 2001/2003 expiring tax cuts and business tax provisions are priority for businesses; card check legislation; climate change legislation, transportation funding (SAFETEA-LU) reauthorization; discussion of the Debt Commission's budget report suggestions; immigration legislation (the DREAM Act); cybersecurity bill; trade legislation; and medicare insurance legislation
- Bottom Line: Congress has a lot to accomplish in a small window of time and uncertainty looms. The bipartisan summit at the White House was postponed until Nov. 30. President Obama must signal openness to compromise. If the 2001/2003 tax cuts expire, we'll experience one of the largest tax hikes in America's history. $3.8 trillion will be placed in the government's hands only 45 days from now unless action is taken.
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