Jan 6, 2016

McGuireWoods Consulting Federal Group Nets Big Wins for Clients in 2015

McGuireWoods Consulting worked overtime in December 2015 in support of a number of clients who had important legislative matters pending as Congress concluded its business for the year. On Friday, December 18, Congress enacted a $1.1 trillion spending bill and an accompanying $680 billion tax package. Ensuring equitable treatment for clients as part of these large bills was difficult primarily because of a lack of transparency in the process. New provisions were added and discarded throughout the process with little input from the public. It placed a premium on strategic engagement, thoughtful analysis, strong contacts, and vigilance, which the McGuireWoods’ Consulting team delivered to make certain that our clients retained a seat at the negotiating table.

We were able to secure several key wins in the waning days of the first session of the 114th Congress. Here are just a few of the major policy victories our clients were able to achieve.

Repeal of Country-of-Origin Labeling (COOL)

McGuireWoods Consulting assisted in securing a major win for a longtime client with the repeal of the pork and beef country-of-origin labeling (COOL) statute mere days before $1.01 billion in retaliatory tariffs were set to be imposed by two of our client’s largest trading partners, Mexico and Canada. Failure to repeal the COOL statute would have devastated the domestic livestock market and ruined long-term commercial relationships across borders. Our team aggressively worked to deliver this solution over the last year, first by supporting broad bipartisan passage of H.R. 2393, the Country of Origin Labeling Amendments Act of 2015 in the House in June and concluding with the similar language being added to the omnibus appropriations bill with bipartisan support. With the repeal of COOL, our client can continue to export its highest-quality products to Mexico and Canada without interruption, ensuring a brighter commercial outlook for 2016.

Suspension of Medical Device Tax

McGuireWoods Consulting’s federal lobbying efforts for two clients in the healthcare industry resulted in a major legislative win as Congress passed an end-of-year tax extenders bill that suspended the medical device tax for two years. Our team lobbied Congress for the past 3 1/2 years to repeal or delay the 2.3 percent excise tax. This two-year suspension will help preserve American jobs and remove a burdensome tax on one of our nation’s most important industries.

Major Win for Embassy Families

McGuireWoods Consulting also helped secure landmark legislation, as part of the reauthorization for 9/11 first responders and victims, that for the first time establishes a special fund that will be used to compensate American victims of terrorism. Our team represented the American employees and victims of the African Embassy bombings in Tanzania and Kenya back in 1998 during the Clinton administration. In addition to our clients, other groups that would be eligible to participate in the fund include the Tehran hostages (1979-1980), the Marines killed in the Beirut bombings (1983) and the victims of Khobar Towers in Saudi Arabia (1996). Until now, U.S. law authorized American victims of terror to secure judgments against terrorist states and groups that perpetrate such acts. However, there was no mechanism to satisfy those judgments, so most American victims were never compensated even after waiting decades. The new law establishes a fund to begin compensating American terror victims with court judgments, which the Congressional Budget Office has said is expected to accrue $2.5 billion over 10 years. The fund will be replenished from fines and forfeitures collected from entities that violate U.S. economic sanctions against terrorist countries and will not use any taxpayer funds.

Work Opportunity Tax Credit Gets Multiyear Extension

On behalf of a Fortune 200 company that administers employee benefits and payroll services to U.S. firms, McGuireWoods Consulting successfully lobbied Congress for a five-year extension to the expired Work Opportunity Tax Credit (WOTC), a provision included in the 2015 tax extenders package. The WOTC is a federal tax credit available to employers who hire individuals from certain target groups who have consistently faced significant barriers to employment, such as veterans, SNAP and TANF program recipients, and ex-felons, among others. Congress has allowed the WOTC extension – a temporary provision of the Internal Revenue Code – to lapse many times before reauthorizing it retroactive to its expiration date. Successful in lobbying an annual extension to the WOTC for the past several Congresses, the McGuireWoods Consulting team continues to work to make this tax credit permanent, as the relatively short extensions of the WOTC and its frequent expiration have caused consternation among employers who utilize the credit.

Changes to REIT Provisions and Lifting of Ban on Exports

The firm’s tax policy team had a number of successes tied to year-end legislation. This included securing important legislative changes to REIT provisions in the tax bill, which benefitted two clients. The tax policy team successfully lobbied Congress to modify the tax-free spinoff provisions involving Real Estate Investment Trusts (REITs) to include certain safe harbors on behalf of a group of four timberland REITs. In addition, the team successfully negotiated a transition rule on behalf of a large energy investment firm that grandfathered a transaction that was underway. The team also represented a number of energy businesses in the debate over ending the decades-old ban on exporting crude oil. The year-end legislation repealed the ban, opening up new markets for America’s energy industry.

Extension and Suspension of Tax Provisions and Prevention of Certain Revenue Raisers

The firm’s tax policy team also assisted several clients in lobbying for the extension of certain expiring tax provisions. Specifically, tax policy team members successfully advocated for a multi-year extension of the bonus depreciation provisions. The tax extender legislation contained a five-year extension and phase-down of bonus depreciation. The team also worked on behalf of several health insurance enterprises to develop a one-year suspension of the health insurance tax under the Affordable Care Act. The tax policy team also achieved a victory in helping delay the “Cadillac” tax for two years, benefitting a client who offers retiree health savings accounts. This tax, which would put a 40-percent levy on employer benefit plans whose value exceeds a government-set threshold, was due to take effect in 2018. Finally, the tax policy team successfully prevented Congress from enacting a modification to the “Stretch IRA” provisions that would have raised money for the federal government but adversely impacted a client’s business.

Protecting Healthcare Clients from Competitive Threats

The firm’s healthcare team helped protect the business operations of two clients. On behalf of an orphan drug company that treats rare, life-threatening diseases, McGuireWoods Consulting was able to block a proposal that would have increased the fees such companies pay on some drugs merely because the drugs did not qualify for an existing tax credit. As part of the agreement that fixed the parameters of the omnibus, McGuireWoods Consulting worked with a healthcare company to ensure that emergency services were exempted from Medicare reimbursement cuts and would remain accessible to patients.

Clean EB-5 Immigration Program Reauthorization

McGuireWoods Consulting worked to ensure that a large Texas real estate development firm did not lose millions of dollars in EB-5 projects by successfully advocating for a clean reauthorization of the EB-5 immigration program in the omnibus. The EB-5 immigration program provides visas to foreign investors in return for capital investment and job creation. When the firm hired McGuireWoods Consulting just days before the program was set to expire, the House and Senate Judiciary Committees, the committees of jurisdiction, were committed to passing a five-year, wholesale reauthorization that would have made the program ineffective and would have placed some existing projects in jeopardy. The McGuireWoods Consulting federal team effectively lobbied members of the Judiciary Committee as well as House and Senate leadership. Moreover, we were able to help galvanize support from other stakeholders to ultimately get a clean extension of the program until September 2016.

Please contact a member of the McGuireWoods Consulting Federal Public Affairs team with any questions or for additional information.