A review of pending federal legislation shows a number of items of interest to roofing contractors.

Predicting legislation in Congress is tricky during any session, but during a contentious presidential election it is particularly tough. A review of pending legislation shows a number of items of interest to roofing contractors. Some are new while others are lingering issues that may finally get some resolution. Association Health Plans (AHP) are on the agenda once again, along with reform of estate taxes, international trade, immigration, depreciation schedules and pension plans. A lot of forces are at work, but the modern contractor can carefully pick his battles and make his voice heard round the world.

"Foreign workers - legal and illegal, temporary and permanent - play a critical role in our economy and our society," testified Rick Berkman, president of Texas Roofing Co. during his recent appearance before the Senate Subcommittee on Immigration, Border Security and Citizenship. "They were vital to our economic growth in the past decade and will be irreplaceable in the next as we face demographic and societal trends that ensure America will not have the number of workers we need to sustain the level of economic growth that America demands."

Public input still makes a difference and the 108th Congress has directly responded to the citizen's will, as evident in recent actions involving the Federal Communications Commission. Roofing industry professionals are urged to contact their legislatures and make their views known to perhaps get some progress in a year of not so great expectations. Partisan bickering is always a part of the landscape, but the current divisions are deep as Republicans and Democrats position themselves for what promises to be a long hot summer.

"I've never seen it this way," says Craig Silvertooth, NRCA's director of federal affairs and 15-year DC veteran. "I think you've got a political problem out there."

The Big Picture

Often the success of legislation is how the argument is framed. Proponents of Association Health Plans have long touted their benefits in reduced insurance rates for small businesses and last year it was seen as a real solution for many uninsured Americans. While both are still important elements, Silvertooth see macroeconomic forces that may push the Senate into action. Because the World Trade Organization fined the U.S. for unfair trade practices, some $50 billion in tax relief to exporters will be eliminated and the Bush Administration is urging Congress to look at other relief. The President is referring to AHP in many speeches and Secretary of Labor Elaine Chao has been pushing legislation for more than a year.

The House passed it for the fifth time, yet it languishes in the Senate where even the threat of a filibuster is enough to forgo scheduling a vote. Some see the Democrats as stalling important solutions while others point to the enormous influence the insurance industry enjoys on both sides of the aisle. After an expanding federal deficit, war and three major tax bills, the possibility for more than one tax bill is slim. That means legislatures have one train to catch with their pet projects.

"The tax bill is getting loaded up with a lot of provisions that aren't germane to it," says Silvertooth. "You want to get hitched to a vehicle and see your particular legislation get passed."

On the immigration front, NRCA got a coup when Berkman was selected as the only small business owner to testify before the Senate subcommittee. He explained that even though some of his employees earn over $50,000 per year, his company cannot attract domestic workers and most of his employees are immigrants. Birkman cited statistics from the Department of Labor saying that the roofing industry will need 50,000 new workers with the next decade and then discussed the merits of having a structured guest worker program. Having a roofing contractor with a firm grasp on the issues is not so unusual according to Silvertooth. In fact, an involved constituency can create enough momentum to line up more votes. Silvertooth believes that President Bush struck a careful balance by introducing the matter in January, yet conservatives in his own party aren't keen about rewarding an estimated 8 million undocumented workers.

"This is highly divisive within the Republican camp," he says, adding that it may be overcome with enough input by concerned employers. "Despite that, the business community is solidly behind this. The system is simply broke."

Breaking Out

Another system that many view as broken is health insurance. After several consecutive years of double-digit rate increases with a corresponding decrease in competition, employers are screaming for relief. Associated Builders and Contractors, a group with 23,000 members, established a health insurance program for its members in 1957 and had more than 30,000 employees covered through it when in 2000, ABC could no longer find carriers to assemble policies. As state legislatures passed mandates for companies offering insurance to employees, the pool of available insurance carriers dwindled.

"I think what the insurance companies are saying is, ‘If the state is going to make it difficult then we'll just stop doing business in that state,'" says Joe Rossmann, vice president of fringe benefits for ABC. "It doesn't have to be that way. Right now we're seeing fewer and fewer plans."

Some local chapters of ABC offer insurance and the national group looked briefly at a self-insurance fund based in its home state of Virginia. Even though there are around half a dozen carriers offering insurance there, many other states have up to 80 percent of the health insurance market controlled by one company. For many, Blue Cross/Blue Shield is the only company willing or able to meet the patchwork of requirements in their state.

Rossmann knows from past experience that they can offer significant savings in administrative and marketing costs. Although the impact on the uninsured remains undetermined, groups like ABC are pointing to polls showing concern among voting Americans about the cost of health insurance and the need for alternatives. Rossmann believes that having established, secure associations assist its membership with health insurance could change the dynamic of current insurance practices. "You're allowing an association to represent the small employer," he says. "We need to allow our associations to work on behalf of small groups."

Stan Kolbe has his plate full, with lobbying efforts on estate taxes, steel tariffs, energy efficiency and pension reform, among others. The director of legislative affairs for the Sheet Metal and Air Conditioning Contractors Association recently wrapped up a conference with 75 members who met with their representatives about pressing needs. One effort is similar to NRCA's: getting a more realistic depreciation schedule for HVAC and roofing systems. SMACNA is looking for a 15-year depreciation while NRCA is seeking 20 years, both a reduction from the Tax Reform Act of 1993, which increased the recovery periods to 39 years.

Even though further tax reform is unlikely, despite being an election year. SMACNA is joining the fight for a permanent repeal of the estate tax and thinks it can be achieved with a business component. "When you transfer a business from parent to child, that should not be a taxable event," says Kolbe, whose members got involved in issues as diverse as the upcoming highway bill and prevailing wage. "I think Congress is very sympathetic ... more favorable to the small businessman and farmer."

The push for health plans, however, is not on the radar for heavily union SMANCA members under collective bargaining agreements. Nonetheless, the association does see it as an extension of the prevailing wage matter on government projects and part of the government's responsibility to pay for the true costs of a sustainable workforce. Coupled with a lack of pensions, a coalition called the Mechanical Electrical Sheet Metal Alliance believes that getting federal procurements to more closely follow its own guidelines will influence the market place to elevate worker benefits.

"In an industry as hazardous as construction, you'd think companies would offer insurance to those who need it," says Kolbe, quoting studies on how low-wage workers with no benefits create tremendous stress on local services. "We think the local government is paying a lot more on their bid then they should. Are we really saving money by going to the bottom of the barrel on bidding?"

Kolbe believes that part of the worker shortage problem stems from low benefits and his group is expending political capital to, in part, make its members competitive in the market.

For anyone taking the time to lobby the government, the stakes are high and there never seems to be enough time to address every concern. It's clear how a crucial item like health insurance costs can frame a larger issue that involves different groups. So, roofing contractors and their allies are encouraged to make their concerns heard, no matter what they are.

"The individual contractor needs to contact his senator and tell him that he's getting killed by insurance," says Silvertooth.