Washington Report 032008

Date Published: 
Original Author: 
Robert M. Fells
Original Publication: 
ICCFA Magazine

The view on Capitol Hill for 2008

As the 110th Congress moves into its second and final session, the ICCFA continues to follow a number of pending bills that could affect our members' businesses. ICCFA members will be meeting with key Congressional legislators in March during the association's second annual Capitol Hill visit. Here's a recap of some of the proposed legislation we are watching:
H.R. 3970: Tax Reduction and Reform Act of 2007. Introduced by Rep. Charles Rangel (D-NY), the powerful chairman of the House Ways and Means Committee, this bill seeks a substantial overhaul of many areas in the federal tax code. Among the more problematic proposals in the bill, a 4 percent tax surcharge would be imposed on individual filers with incomes greater than $150,000 annually, and on couples with incomes greater than $200,000. Together with expiring tax cuts that Congress has failed to act on so far, the marginal tax rates for individuals and small businesses would increase from the current top rate of 35 percent to 44.2 percent. Also, the LIFO (last-in-first-out) inventory method would be repealed and the estate tax would be restored from 0 to 55 percent. The ICCFA has joined the Tax Reform Coalition to oppose this legislation.
The coalition represents over 1,000 trade associations, business organizations and corporations. Check its Web site at www.taxreliefcoalition.org.
H.R. 800/S. 1041: Employee Free Choice Act. This misnamed bill seeks to repeal employees' right to vote by secret ballot for union representation. The proposal would require binding arbitration for a first contract where an arbitrator, not management and the union, could decide the terms of the labor contract. The bill also would impose substantial new fines on employers. As bad as this bill sounds, it quickly passed the House of Representatives in March by a vote of 241-185, divided mainly along party lines. The Senate companion bill, S. 1041, was introduced with 46 co-sponsors but a vote on the legislation was tabled in late June. Conventional wisdom suggests that this bill will remain tabled for this session of Congress, but will be re-introduced early in 2009 where its proponents predict swift passage and enactment by the new president. Labor unions currently seek to unionize businesses with as few as three employees, so the bill should be of concern to small business owners. The ICCFA opposes this legislation and has joined the Coalition for a Democratic Workplace at www.myprivateballot.org.
H.R. 1273: Restoration of the Veterans Plot and Marker Cash Allowances in Private Cemeteries. At the request of the ICCFA, Rep. Shelley Berkley (D-NV) introduced this bill to restore the popular VA plot and marker allowances that benefited veterans and their families who chose interment in private or religious cemeteries. These two burial benefits were curtailed by Congress in 1990; the ICCFA has estimated that up to 70 percent of veterans who were eligible to receive these benefits were disqualified as a result. In July, the ICCFA testified at a hearing on the bill, which was supported by various veterans organizations, including the Veterans of Foreign Wars, the American Legion and the Paralyzed Veterans of America. 
H.R. 1264: To Remove Dollar Cap on Qualified Funeral Trusts. This bill has become something of a perennial piece of legislation being introduced in the last few Congresses. The bill seeks repeal of the dollar limitation on funeral trusts organized as "qualified funeral trusts" or QFTs under section 645 of the Internal Revenue Code. In these types of preneed trusts, the trustee elects to pay the federal income tax on trust earnings in lieu of the purchaser. However, there is a dollar limit for such trusts that is indexed annually for inflation; for 2007, the dollar limitation is $8,800. This legislation, introduced by Rep. Ron Kind (D-WI), has 17 co-sponsors and was referred to the Ways and Means Committee. A companion bill, S. 1743, is pending in the Senate Finance Committee. For more information on using IRS Form 1041 QFT, check www.irs.gov/pub/irs-pdf/f1041qft.pdf.
S. 989: To Codify Exclusions from Assets for Irrevocable Funeral/Burial Contracts. Another perennial bill in Congress, this bill was introduced by Sen. Blanche Lincoln (D-AR), and seeks to amend Title XVI of the Social Security Act to clarify that the value of certain funeral and burial arrangements are not to be considered resources for purposes of qualifying for the supplemental security income program. Specifically, the bill would codify into federal law the current policy of the Social Security Administration that excludes funds paid by individuals under an irrevocable preneed contract, when the funds are placed into an irrevocable trust with the funeral provider as the named trust beneficiary. The bill has been referred to the Finance Committee. A companion bill, H.R. 1629, has been introduced in the House. Finally, it may be almost as important to note legislation that has not been introduced to date. Proposals by Sen. Chris Dodd (D-CT) were introduced twice in past years seeking the federal regulation of funeral homes, cemeteries, crematories and related businesses. No similar legislation is currently pending, but the fallout from the Clayton Smart investigations in Tennessee and Michigan could serve as a catalyst for renewed Congressional oversight of the profession. The ICCFA remains vigilant.