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Market Trends

Public Policy Initiatives

PTDA relies on its memberships in the National Association of Wholesaler-Distributors (NAW) and National Association of Manufacturers (NAM) to fulfill all public policy and government relations functions.

Through these organizations, PTDA is active in supporting efforts to pass or amend legislation to address the following priority issues.  Click on a link for a particular issue:

Research and Development Credit

Manufacturers perform nearly two-thirds of all private research and development in the United States, with nearly 16,000 companies using the research and development tax credit.  A strengthened credit will ensure that all companies performing significant research and development in the United States benefit.

Status: The temporary credit expired on Dec. 31, 2005. NAM seeks to extend the credit. 

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Comprehensive Energy Strategy

The U.S. Senate and House of Representatives enacted the Energy Policy Act on Aug. 8, 2005 which works to increase supplies of reliable, affordable and renewable energy; provide incentives to improve energy infrastructure; and promote efficiency and conservation.

Status: Energy Policy Act enacted in 2005.

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Medical Liability Reform

Unlimited damage awards, the rising cost of medical liability insurance and wasteful defensive medical practices contribute to the rising cost of health coverage and reduce the availability of doctors and other health care services.  Medical liability reform will improve patient access to health care services and lower health care costs.

Status: The U.S. House of Representatives advanced several significant portions of NAM's health care agenda in July 2005. 

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Undervalued Chinese Currency/Currency Manipulation

In 1994, China devalued its currency by approximately 30 percent and maintained that value for over ten years, despite a huge increase in production capability and quality, productivity, foreign direct investment and other factors that normally would be expected to cause a currency to appreciate.  This currency undervaluation has had a significant effect on the U.S. trade deficit with China, which was approximately $200 billion in 2005.

Status:  Modest progress has been made with China.  In July 2005, China said it would no longer base its currency to the dollar, but to a basket of currencies, and raised the yuan's value 2.1 percent.

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Asbestos Litigation

Nearly 70 companies have gone into bankruptcy due to asbestos liability, abolishing 60,000 jobs, pensions and 401(k)s, and bringing 8,400 companies into court, at a cost of $343 billion to the U.S. economy.  NAM seeks a congressional solution providing sensible reforms.

Status: The Fairness in Asbestos Injury Resolution (FAIR) Act awaits a Senate vote in early 2006. 

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Permanent Estate Tax Repeal

Unless the estate tax bill is fully repealed or a compromise is made, under current law, the tax will phase out in 2010, then return to pre-tax-cut levels in 2011. 

Status: The bill was passed in the U.S. House of Representatives in April 2005 and now will go to the Senate for vote.

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Association Health Plans

The association health plans (AHP) bill would allow bona-fide trade associations to offer health care coverage to members across state lines and without state benefit mandates, private coverage more affordable.

Status: The bill was defeated in the U.S. Senate on May 12, 2006. 

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Inside Sales Overtime Rules Reform

On April 23, 2004, the Department of Labor (DOL) issued final regulations under the Fair Labor Standards Act (FLSA) implementing new, updated regulations covering exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales and computer employees.  Unfortunately, the new rules do not remedy that inside sales are classified as non-exempt. 

Status: Congress needs to amend the FLSA to grant the Labor Department the authority to promulgate regulations concerning inside sales personnel. NAW continues to actively pursue legislation to provide reform.

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Ergonomics Standards

Rather than issuing federal legislation to address ergonomic issues in the workplace that would have been costly for businesses to implement, the Department of Labor (DOL) has issued a comprehensive four-pronged approach  that focuses on highly hazardous industries.  OSHA’s guidelines are being used in nursing home, retail grocery and poultry processing industries under the OSHA Act’s general duty clause. 

Status: Ergonomics issues are currently being monitored.  

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Abolition of Capital Gains Tax

Legislation enacted in 1997 lowered the top rate on individual capital gains from 28 percent to 20 percent.  In May 2003, the top tax rate on individual capital gains was lowered to 15 percent.  NAM supports similar permanent reductions in capital gains tax rates for corporations and is lobbying to extend or make these cuts permanent. 

Status: Congress has yet to act in 2006, but the outlook for an extension looks promising.

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Lawsuit Abuse Reform

The U.S. House of Representatives passed the Lawsuit Abuse Reduction Act of 2005 (LARA),on Oct. 27, 2005.  LARA will deter the filing of “junk” lawsuits by sanctioning lawyers that bring them and also properly limiting the filing of personal injury claims to places where plaintiffs live or were hurt, or in the jurisdiction of the defendant’s principal place of business.

Status: Lawsuit Abuse Reduction Act enacted in 2005.

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LIFO Repeal

The U.S. Senate Finance Committee recently has threatened to repeal the last-in, first-out (LIFO) inventory and accounting method.  The repeal would change a 70-year old GAAP approved accounting procedure that dominates the distribution industry.

Status: In June, an accounting professor provided an inaccurate testimony in front of the Finance Committee criticizing LIFO.  PTDA members are encouraged to take action against this testimony and the proposed repeal.

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