December 7, 2023

Washington Wire: Bills Reinstating R&D Expensing Introduced

04/12/2023

 

Bills Reinstating R&D Expensing Introduced
 
On March 17, Sens. Todd Young (R-IN) and Maggie Hassan (D-NH) reintroduced their bipartisan American Innovation and Jobs Act to support research and development (R&D) investments by allowing companies to treat research or experimental expenditures paid or incurred during the taxable year as expenses and not taxable as an asset. Representatives Ron Estes (R-KS) and John Larson (D-CT) intend to introduce their bipartisan companion bill on April 17th, once lawmakers return to Washington, D.C. following a two-week district work period.
 
One Voice has formally endorsed the legislation and is actively lobbying lawmakers to fix the issue of paying taxes on R&D expenses as an asset by reversing the provision included in the 2017 law known as Section 174. Sources on Capitol Hill indicate that the U.S. House tax writing committee may begin the process of moving on legislation in May and the Senate is increasingly becoming aware of the negative impact Section 174 is having on manufacturers. Introduction in the House and Senate of these bipartisan bills is an important step towards providing relief for businesses, though lawmakers are still in search of must-pass legislation on which to attach a provision reinstating R&D expensing.
 
Your voice matters and Congress needs to hear from you about the negative consequences of not acting to reinstate full R&D expensing. Contact your members of Congress today and urge them to cosponsor this important legislation.  Click here and make your voice heard!

 

 
  
Biden Vetoes Resolution Blocking WOTUS
 
President Biden has issued the second veto of his Administration, vetoing the Congressional Review Act (CRA) blocking the Environmental Protection Agency (EPA) and Army Corps of Engineers’ rule redefining “waters of the United States” (WOTUS).
 
The veto comes after the Senate approved the measure by a vote of 53-43 on March 29, with four Democrats and one Independent joining Republicans in supporting repeal of the regulation. Democrats voting for the resolution include Senators Catherine Cortez-Masto (D-NV), Jacky Rosen (D-NV), Jon Tester (D-MT), and Joe Manchin (D-WV), accompanied by Independent Senator Kyrsten Sinema (I-AZ).
 
Biden vetoed the resolution stating that the regulation provides clear boundaries while approving the resolution to roll back the new definition would create increased uncertainty. “The 2023 revised definition of ‘Waters of the United States’ carefully sets the bounds for which bodies of water are protected under the Clean Water Act [CWA]. It provides clear rules of the road that will help advance infrastructure projects, economic investments, and agricultural activities -- all while protecting water quality and public health,” Biden’s April 6 veto message to the House of Representatives stated.
 
While the WOTUS rule survived this Congressional action, it still faces several legal challenges from states and industry in federal district courts across the country.
 
A federal judge in North Dakota granted industry groups’ request to intervene in states’ litigation challenging the rule allowing them to file for a national injunction. The industry group is asking for a nationwide injunction in the case, in which a coalition of 24 Republican state attorneys general are charging that EPA’s rule exceeds the power Congress delegated under the Clean Water Act (CWA) and raises serious constitutional concerns, arguing that the rule has a nationwide effect and any injunction should occur in all states and not just the 24 that filed the case.    
 
Meanwhile, Judge Gregory Van Tatenhove of the U.S. District Court for the Eastern District of Kentucky issued a March 31 order denying the state of Kentucky as well as a number of industry groups’ motions for a preliminary injunction, and dismissed the case entirely, citing a lack of standing. Tatenhove determined that claims by the state and industry are not ripe for review, noting that at this point they allege “only uncertain concerns about the Rule’s impact,” and that at this point “the claimed financial and sovereignty injuries are too speculative to constitute imminent injuries in fact.” On April 4, Kentucky filed an emergency motion for injunction with the district court, arguing that the decision to dismiss the case is based on “legal errors” and likely to be overturned.

 

 

 
Biden Issues EO on Regulations
 
President Biden has issued an executive order (EO) changing the determination for when regulations are subject to review by the White House. Currently, “major rules” are those that might have an economic impact of at least $100 million. These “significant regulatory actions” are reviewed by the Office of Information and Regulatory Affairs (OIRA) and approved before they can take effect.
 
Biden’s “Executive Order on Modernizing Regulatory Review,” signed on April 6, 2023, increases the monetary threshold for determining whether a rule is a significant regulatory action to $200 million while also requiring the threshold to be adjusted every three years by OIRA to account for inflation.
 
The $100 million figure was first set in 1981 by President Reagan and then retained in regulatory review overhauls by President Clinton in 1993 and President Obama in 2011. However, the Administration believes that the new threshold is needed to limit the number of rules subject to review and “focus OIRA and agency resources where they are most beneficial.”
 
Under the EO, OIRA can choose to review rules that to do meet the “significant regulatory action” criteria for rules that may “adversely affect in a material way . . . the environment, public health or safety” or “policy issues for which centralized review would meaningfully further the President’s priorities.”

 

 

  
Applications Open for EXIM Bank Advisory Committees
 
The Export-Import Bank of the United States (EXIM) is seeking candidates to join its advisory committees and councils. EXIM is accepting applications to join the Council on Small Business, Council on China Competition, Council on Advancing Women in Business, Council on Climate, Sub-Saharan Africa Advisory Committee, and the Advisory Committee.
 
The EXIM advisory councils are subcommittees of EXIM’s Advisory Committee and submit recommendations and advice to the Advisory Committee on their specific areas of expertise. Last year, EXIM added the Council on Small Business to provide recommendations on how the bank can support small exporters.
 
EXIM is accepting applications through April 28.