Scores of building material dealers and association executives headed to Capitol Hill today to urge members of Congress to repeal a paperwork mandate spawned by last year's health care reform package, halt expansion of intensely disliked Environmental Protection Agency (EPA) rules on lead paint, and protect dealers from getting caught up in product-related lawsuits simply because they sold the product.
The visits by members of the National Lumber and Building Materials Dealers Association (NLBMDA) followed a breakfast speech by Rep. Mike Pence, R-Ind., in which the conservative leader said the mortgage interest deduction should be abolished as part of a shift toward a flat tax.
Target No. 1 for NLBMDA members was a provision in the health care reform act requiring all business that spend at least $600 with a vendor, supplier, or contractor to file a 1099 tax form with the Internal Revenue Service identifying who got the money. That provision doesn't have anything to do with health care; rather, it was added because the requirement is expected to generate $17 billion that would pay for health care initiatives.
Small-business advocacy groups such as the NLBMDA have blasted the provision as a huge administrative burden. Ultimately Washington took notice--including President Barack Obama, who had been hesitant to measures opening up the health care reform package to change. Earlier this year, the House passed legislation repealing the form 1099 rule, and the Senate added an amendment to another bill that did much the same thing. So far, however, the two sides haven't come together on consistent language that could be sent to President Obama for his signature.
NLBMDA urged dealers to push House members to work with the Senate to ensure "timely resolution" of the issue and to urge Senators to schedule a vote on the House-pased bill. In particular, NLBMDA asked dealers to find out from members whether their support of the 1099 provision's repeal was conditional on finding an alternative source of funding for health care.
The The EPA lead-paint rule, which took effect last April 22, requires contractors performing renovation, repair, and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 to be certified and follow specific work practices to prevent lead contamination. The rules are intended to protect children and pregnant women from lead-based paint, exposure to which can lead to learning disabilities, behavior issues and reduced intelligence. Ignoring the mandate can lead to fines of as much as $37,500 per day.
Last August, NLBMDA formally urged the to halt plans to add extra testing requirements to the lead-paint rule until the agency makes a better assessment of the rule's current impact and effectiveness. (Story) The association also has joined with other groups in filing suit challenging the EPA's legal authority to eliminate a provision that had enabled homeowners to decide whether to opt out of the rule's effect if they lived in a home without children or pregnant women. (Story)
For today's and Wednesday's Hill visits, NLBMDA urged dealers to ask that their members of Congress petition EPA's administrator, calling on her to reject the extra testing requirements (known as "clearance testing") as well as to stop the agency from issuing rules that would expand the lead-paint mandate to commercial and public buildings.
The third major NLBMDA initiative involves a hardy perennial of a legislative wish: The Innocent Sellers Fairness Act (ISFA). This proposal protects from liability suits any dealer that simply sells a legal product without altering it and that does not act negligently in handling the product. The measure is designed to keep dealers from being caught up in lawsuits brought when products are alleged to have failed to perform as promised.
NLBMDA has been promoting this issue for at least five years with scant success. Most of the time, it has had trouble finding more than a few dozen members willing to co-sponsor the measure. This year, operating in a much friendlier environment, NLBMDA hopes to generate enthusiasm on the House side for a bill that NLBMDA hopes will be introduced by Rep. Dan Boren, D-Okla., and hopefully Rep. Steve Chabot, R-Ohio. No potential Senate sponsors have been lined up.
In picking the 1099 provision, the EPA's lead rule and ISFA as its top priorities, NLBMDA in effect decided to downplay the question of whether the mortgage interest deduction should remain. Members of the National Association of Home Builders were expected to stress retaining this provision when they visit Capitol Hill this week. But the reception they get may be chilly, if Pence is any example of views among the Republican House majority.
Pence stressed in his breakfast address to dealers that "it's time to pick a fight" on Capitol Hill over federal spending and federal regulations. Among other things, he called for replacing what many call a current, multitiered, loophole-ridden tax system with a flat tax. He also spoke up for regulatory reform.
Replying to a question, Pence said his tax-reform views include eliminating the mortgage deduction. "I do believe in fundamental tax relief," he said. "You'd have people beating a path to buying a house if we lowered taxes." And it's better to have comprehensive relief rather than permitting specific bits and pieces of tax incentives that amount to "fighting for scraps under the table," he said.
Afterward, NLBMDA gave Pence is Legislator of the Year award. It also presented its Grassroots Dealer of the Year award to Chris Yenrick, general manager of Smith Phillips Building Supply, Winston-Salem, N.C.