McGuireWoods Consulting Federal Group Nets Big Wins for Clients in 2015

January 6, 2016

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McGuireWoods Consulting worked overtime in December 2015 in support of anumber of clients who had important legislative matters pending as Congressconcluded 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 wasdifficult primarily because of a lack of transparency in the process. Newprovisions were added and discarded throughout the process with little inputfrom the public. It placed a premium on strategic engagement, thoughtfulanalysis, strong contacts, and vigilance, which the McGuireWoods’ Consultingteam delivered to make certain that our clients retained a seat at thenegotiating table.

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

Repeal of Country-of-Origin Labeling (COOL)

McGuireWoods Consulting assisted in securing a major win for a longtimeclient 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 beimposed by two of our client’s largest trading partners, Mexico and Canada.Failure to repeal the COOL statute would have devastated the domestic livestockmarket and ruined long-term commercial relationships across borders. Our teamaggressively worked to deliver this solution over the last year, first bysupporting broad bipartisan passage of H.R. 2393, the Country of Origin LabelingAmendments Act of 2015 in the House in June and concluding with the similarlanguage being added to the omnibus appropriations bill with bipartisan support.With the repeal of COOL, our client can continue to export its highest-qualityproducts to Mexico and Canada without interruption, ensuring a brightercommercial outlook for 2016.

Suspension of Medical Device Tax

McGuireWoods Consulting’s federal lobbying efforts for two clients in thehealthcare industry resulted in a major legislative win as Congress passed anend-of-year tax extenders bill that suspended the medical device tax for twoyears. Our team lobbied Congress for the past 3 1/2 years to repeal or delay the2.3 percent excise tax. This two-year suspension will help preserve Americanjobs and remove a burdensome tax on one of our nation’s most importantindustries.

Major Win for Embassy Families

McGuireWoods Consulting also helped secure landmark legislation, as part ofthe reauthorization for 9/11 first responders and victims, that for the firsttime establishes a special fund that will be used to compensate American victimsof terrorism. Our team represented the American employees and victims of theAfrican Embassy bombings in Tanzania and Kenya back in 1998 during the Clintonadministration. In addition to our clients, other groups that would be eligibleto participate in the fund include the Tehran hostages (1979-1980), the Marineskilled in the Beirut bombings (1983) and the victims of Khobar Towers in SaudiArabia (1996). Until now, U.S. law authorized American victims of terror tosecure judgments against terrorist states and groups that perpetrate such acts.However, there was no mechanism to satisfy those judgments, so most Americanvictims were never compensated even after waiting decades. The new lawestablishes a fund to begin compensating American terror victims with courtjudgments, which the Congressional Budget Office has said is expected to accrue$2.5 billion over 10 years. The fund will be replenished from fines andforfeitures collected from entities that violate U.S. economic sanctions againstterrorist 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 andpayroll services to U.S. firms, McGuireWoods Consulting successfully lobbiedCongress 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 federaltax credit available to employers who hire individuals from certain targetgroups who have consistently faced significant barriers to employment, such asveterans, SNAP and TANF program recipients, and ex-felons, among others.Congress has allowed the WOTC extension – a temporary provision of the InternalRevenue Code – to lapse many times before reauthorizing it retroactive to itsexpiration date. Successful in lobbying an annual extension to the WOTC for thepast several Congresses, the McGuireWoods Consulting team continues to work tomake this tax credit permanent, as the relatively short extensions of the WOTCand its frequent expiration have caused consternation among employers whoutilize 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-endlegislation. This included securing important legislative changes to REITprovisions in the tax bill, which benefitted two clients. The tax policy teamsuccessfully lobbied Congress to modify the tax-free spinoff provisionsinvolving Real Estate Investment Trusts (REITs) to include certain safe harborson behalf of a group of four timberland REITs. In addition, the teamsuccessfully negotiated a transition rule on behalf of a large energy investmentfirm that grandfathered a transaction that was underway. The team alsorepresented a number of energy businesses in the debate over ending thedecades-old ban on exporting crude oil. The year-end legislation repealed theban, opening up new markets for America’s energy industry.

Extension and Suspension of Tax Provisions and Prevention of CertainRevenue Raisers

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

Protecting Healthcare Clients from Competitive Threats

The firm’s healthcare team helped protect the business operations of twoclients. On behalf of an orphan drug company that treats rare, life-threateningdiseases, McGuireWoods Consulting was able to block a proposal that would haveincreased the fees such companies pay on some drugs merely because the drugs didnot qualify for an existing tax credit. As part of the agreement that fixed theparameters of the omnibus, McGuireWoods Consulting worked with a healthcarecompany to ensure that emergency services were exempted from Medicarereimbursement cuts and would remain accessible to patients.

Clean EB-5 Immigration Program Reauthorization

McGuireWoods Consulting worked to ensure that a large Texas real estatedevelopment firm did not lose millions of dollars in EB-5 projects bysuccessfully advocating for a clean reauthorization of the EB-5 immigrationprogram in the omnibus. The EB-5 immigration program provides visas to foreigninvestors in return for capital investment and job creation. When the firm hiredMcGuireWoods Consulting just days before the program was set to expire, theHouse and Senate Judiciary Committees, the committees of jurisdiction, werecommitted to passing a five-year, wholesale reauthorization that would have madethe program ineffective and would have placed some existing projects injeopardy. The McGuireWoods Consulting federal team effectively lobbied membersof the Judiciary Committee as well as House and Senate leadership. Moreover, wewere able to help galvanize support from other stakeholders to ultimately get aclean extension of the program until September 2016.

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