New Jersey Senate would crack down on corporate inversions

Tax inversions are to some unpatriotic and unethical; they speak to the need for more loophole-thwarting regulations and tax reform. To others, the real threat to the U.S. corporate tax base is our corporate tax code itself, with the third-highest overall rate in the world and a worldwide system that requires American companies to pay a toll charge to bring their profits back home. Thus, the solution to the inversion “problem” is to dramatically cut the corporate rate and to move to a territorial tax system, not add even more unnecessary rules to an already complicated tax code.

Meanwhile, three measures in the New Jersey Senate that would crack down on corporate inversions by banning inverted companies from state contracts and other subsidies were voted out of committee Thursday, the latest move to stem the tide of companies pursuing mergers to reincorporate in tax-friendly jurisdictions outside the U.S.

In a 3 to 2 vote on Thursday afternoon, the New Jersey Senate State Government, Wagering, Tourism & Historic Preservation Committee passed bills S2397, S2361 and S2471, which would ban the award of state contracts other state subsidy grants to corporations that merge with foreign companies or shift their income abroad in order to avoid U.S. tax obligations.

New Jersey Sen. Shirley Turner, D-Mercer, who sponsored two of the bills said at the meeting that the measures are meant ensure that corporations who take advantage of the services and quality of life of this country pay their “fair share” of taxes. She pointed out that U.S.-based corporations are beneficiaries of the country’s educated workforce, transportation infrastructure and safety, among other advantages, that are made possible through taxes.

However, opponents of the bills expressed concern that punishing corporations for what amounts to a “paper move” will scare companies away from investing in the state and hinder job creation.

Under the bills, inverted corporations would be ineligible for state contracts, economic development grants and other types of financial aid including reimbursement of taxpayer-subsidized programs, such as Medicaid.

Turner also introduced a joint resolution calling on federal lawmakers and the President to enact the “Stop Corporate Inversions Act of 2014.”

“The increasing trend of corporate inversions is not just a Washington problem; it’s a New Jersey problem, too,” Turner said in a statement released Thursday. “When multi-billion dollar corporations shift their income abroad to reduce their U.S. corporate tax rate, the state can no longer tax those corporate profits. Every other taxpayer must then pay more to make up for the lost revenue in order to maintain government services. It’s no wonder the state can’t meet its financial obligations.”

The growing popularity of inversions has spawned backlash from the Obama administration, which in September  introduced several rule changes stripping away tax benefits of inversion deals. However, with legislative changes still necessary to completely shut down inversions, U.S. Treasury Secretary Jacob Lew said this month that the White House is not done looking at its administrative options.

Meanwhile, Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, said last week that corporate tax reform that moves the country to a territorial system of taxation is the best solution to stop corporations from pursuing tax inversion deals.

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SENATE PASSES ONLY I OF 12 KEYSTONE XL AMENDMENTS

The U.S. Senate on Wednesday took up a dozen amendments to the Keystone XL pipeline legislation, passing only one concerning energy retrofitting for schools, two days after Democrats refused to end debate on the bill until all pending amendments had been voted on.

GOP leaders had initially planned to vote on 18 amendments, but put off at least six more until Thursday. Senate Energy and Natural Resources Committee Chairman Lisa Murkowski, R-Alaska, said on the Senate floor she hoped for final passage of the bill on Thursday after votes on the remaining amendments.

Eleven of the amendments failed to garner the required 60 votes needed for passage, according to Senate roll call records. One amendment passed by a voice vote would appoint the U.S. Department of Energy to streamline information about existing federal programs to finance school energy projects.

The Keystone bill would allow Congress to approve an $8 billion project that would link Canada’s tar sands crude oil to refineries 1,700 miles away on the Gulf Coast.

None of the other amendments, from both Republicans and Democrats, got more than 54 votes. Murkowski had proposed removing land from consideration as wilderness areas unless Congress acts on them within a year, coming on the heels of President Barack Obama’s plan to make part of the Arctic National Wildlife Refuge a wilderness area and permanently ban drilling there.

Other failed amendments included campaign finance disclosure requirements for companies that stand to make more than $1 million from the tar sands, by Sen. Sheldon Whitehouse, D-R.I.; removing the lesser prairie chicken from the threatened species list, by Sen. Jerry Moran, R-Kan.; speeding up the approval process for liquefied natural gas exportation to World Trade Organization members, by Sen. Ted Cruz, R-Texas; and a nonbinding statement opposing presidential authority to unilaterally designate new national monuments, by Sen. Steve Daines, R-Mont.

The failed cloture vote on Monday was part of the Democrats’ protest of Senate Majority Leader Mitch McConnell’s bid to end debate before all pending amendments had been decided.

Keystone XL is intended to carry tar sands crude oil from Alberta, Canada, to the Gulf Coast, with a southern 485-mile portion of the proposed span running from the crude market hub at Cushing, Oklahoma, to refineries near Port Arthur, Texas, having already been approved.

The House version of the bill approving the pipeline, bypassing the traditional executive branch approval process needed for projects that cross an international border, passed Jan. 9 with mainly Republican support.

The White House has continued to hold off on approval of the pipeline, despite fierce pressure from GOP lawmakers and business groups and a Nebraska Supreme Court decision earlier this month that upheld the state’s approval of the Keystone route through the state, a case that had been cited by Obama as a major stumbling block for the pipeline.

The administration has threatened to veto any legislation seeking to force its hand, and although lawmakers can override a veto with a two-thirds majority in each chamber, the party makeup of each chamber and related votes so far suggest any such effort would fall short.

KEYSTONE XL PIPELINE BILL STALLED IN SENATE

The U.S. Senate on Monday failed to approve the Keystone XL pipeline bill after a vote fell short of the required number needed to end long-running debate, as Democrats protested Senate Majority Leader Mitch McConnell’s bid to end debate before all pending amendments had been decided. Keystone XL is intended to carry tar sands crude oil from Alberta, Canada, to the Gulf Coast, with a southern 485-mile portion of the proposed span running from the crude market hub at Cushing, Oklahoma, to refineries near Port Arthur, Texas, having already been approved.

The Keystone bill would allow Congress to approve an $8 billion project that would link Canada’s tar sands crude oil 1,700 miles to refineries on the Gulf Coast.

The Senate voted 53-39 on the measure, short of the required 60 votes to invoke cloture, sending potential final passage of the bill into next week. The Senate has been debating the bill, its top priority, since the new Congress convened Jan. 6.

Democrats were angered by the tactics of McConnell, R-Ky., who kept the Senate working until midnight last Thursday to get through Keystone amendments filed by both parties and tabled several Democratic amendments at midnight.

Ahead of the vote, McConnell urged fellow senators to pass the bill.

The House version of the bill approving the pipeline, bypassing the traditional executive branch approval process needed for projects that cross an international border, passed Jan. 9 with mainly Republican support.

The White House has continued to hold off on approval of the pipeline, despite fierce pressure from GOP lawmakers and business groups and a Nebraska Supreme Court decision earlier this month that upheld the state’s approval of the Keystone route through the state, a case that had been cited by President Barack Obama as a major stumbling block for the pipeline.

The administration has threatened to veto any legislation seeking to force its hand, and although lawmakers can override a veto with a two-thirds majority in each chamber, the party makeup of each chamber and related votes so far suggest any such effort would fall short.

NEW JERSEY SENATE TO PUSH BPU ON OFFSHORE WIND FARM APPROVAL

The New Jersey Senate Environment and Energy Committee on Monday pushed forward legislation that would force the Board of Public Utilities to approve the first wind farm off the state’s coast, even though the project has been blocked twice.

The committee approved two measures, one of which would compel the BPU to approve 25-megawatt demonstration project proposed by the Fishermen’s Energy LLC. Sponsored by committee chairman Bob Smith, D-Middlesex, and state Sen. Jim Whelan, D-Atlantic City, S2711 would also remove requirements from the New Jersey Offshore Wind Economic Development Act that a cost-benefit analysis must be submitted with the pilot project and that the BPU must use the analysis in its approval.

The project has hit administrative roadblocks, stalling its progress, since Fishermen’s first filed its application in 2011. The matter is back before the New Jersey Appellate Division after the state Board of Public Utilities on Nov. 21 again denied the plans. The regulator previously shot down the application in March, which Fishermen’s appealed, but the court returned the case to the agency in August to consider a $47 million grant commitment from the U.S. Department of Energy.

The second measure, SR112, sponsored by Smith and Senate President Steve Sweeney, D-Gloucester, would push the BPU to implement the OWEDA and another law, the Electric Discount and Energy Competition Act. The law directed the agency to develop an offshore wind renewable energy certificate program that would mandate a percentage of electricity sold in the state to be from wind energy.

The senators noted during the hearing that although the OWEDA was passed in 2010, little progress has been made on the wind farm project.

The offshore wind renewable energy certificates will help finance the project and ultimately be passed on to ratepayers.

S2711 was approved by the committee, 4-1, and SR112 by a 5-0 vote. Both measures now head to the state Senate floor.

The BPU has refused to budge from its view that the project wouldn’t provide a net economic and environmental benefit to New Jersey ratepayers, as the OWEDA requires. The regulator has also found that Fishermen’s hasn’t demonstrated financial integrity.

“We’ve been trying for a lot of years to get offshore wind going in this state,” Smith said. “Seven, eight years later we have nothing.”

NJ ENVIRO, PLANNING GROUPS SEEK VETO OF MEADOWLANDS BILL

Conservation, environmental and Smart growth groups on Friday urged New Jersey Gov. Chris Christie to veto plans to consolidate an agency that has overseen development and environmental improvements in the Meadowlands and overhaul a regional tax sharing system, contending that the changes would undermine decades of balanced planning.

New Jersey Future and 10 other organizations sent a letter to Christie spelling out concerns over the legislation that would fold the New Jersey Meadowlands Commission — a zoning and planning agency for a 30.4-square-mile area in Bergen and Hudson counties — into the New Jersey Sports and Exposition Authority. The NJSEA manages the Meadowlands sports complex in East Rutherford, which includes MetLife Stadium and other facilities.

The commission was created to encourage orderly development, protect environmental assets and provide solid waste facilities, but the bill that the state Legislature sent to the governor’s desk in December would fundamentally weaken the Meadowlands program, according to the groups, which include the New Jersey Sierra Club, the New Jersey Highlands Coalition, the Regional Plan Association, the New Jersey Conservation Foundation and Environment New Jersey.

Fourteen towns in Bergen and Hudson counties are part of the Meadowlands tax sharing program. Under the legislation, municipalities that currently make payments into the program — Carlstadt, Little Ferry, Lyndhurst, Moonachie, North Bergen, Secaucus and South Hackensack — would no longer do so because of a 3 percent use assessment on the revenues from hotel room occupancies in all 14 towns, according to lawmakers. The hotel use assessment would generate about $6.9 million to $10.3 million annually in additional revenue, according to the Office of Legislative Services.

Municipalities that currently receive money from the program — East Rutherford, Jersey City, Kearny, North Arlington, Ridgefield and Rutherford — would continue to see that funding, lawmakers have said. The tax sharing program was devised in the 1970s to address the impact of regional zoning in the Meadowlands area, according to lawmakers.

However, groups fighting the bill note that it leaves the state on the hook for subsidy payments if the program comes up short.

New Jersey Future and its allies further contend that the legislation — which was first introduced on Dec. 11 and sponsored by lawmakers including Assembly Speaker Vincent Prieto, D-Hudson —  jeopardizes Liberty State Park in Jersey City by giving the NJSEA the green light to undertake projects there and sideswipes the Meadowlands Environmental Research Institute and its work to restore marshes and other natural features by shifting its responsibilities to a not-for-profit organization.

By combining the Meadowlands Commission with the NJSEA, the legislation would encourage greater government efficiencies in the pursuit of economic growth for the region, sponsors have said.

Greek Syriza Party Leading in Polls Ahead of Today’s Election

Greek Syriza Party Leading in Polls Ahead of Today’s Election

Greek Syriza Party Leading in Polls Ahead of Sunday’s Election… The left-leaning Syriza party looks poised to take control of parliament in Greece.

What it means — As mentioned last week, Alexis Tsipras, the leader of Syriza, has toned down his calls for dramatic change as the elections get closer. But he is still advocating for reversing many of the austerity measures currently in place and reducing the debt that Greece owes to outside lenders.

The Troika of lenders who bailed out Greece — the ECB, the International Monetary Fund (IMF), and the European Commission — have drawn a line in the sand. They demand Greece maintain all austerity measures and make good on their debt. The IMF leader, Christine LaGarde, stated that: “A debt is a debt,” which is just a touch hypocritical since she helped orchestrate Greece’s write down of bonds three years ago, costing private investors hundreds of millions of dollars.

If Syriza wins on Sunday, the question is will Tsipras use the possibility of Greece leaving the euro to extract some reduction in the debt Greece owes. This seems the most likely scenario. The Troika would much rather “assist” Greece by easing repayment terms or reducing their debt outright than create a precedent by which a country leaves the euro.

HOUSE OKS BILL TO SPEED UP NATURAL GAS PIPELINE PERMITS

The U.S. House of Representatives on Wednesday passed legislation requiring the Federal Energy Regulatory Commission and other federal agencies to approve or reject natural gas pipelines within a strict time limit or see the project automatically approved, over the threat of a presidential veto.

H.R. 161, the Natural Gas Pipeline Permitting Reform Act, passed in a 253-169 vote, attracting little Democratic support amid concerns about putting “rushed” deadlines on a process that may involve a consideration range of complex issues, such as environmental, safety and eminent domain concerns.

Under the terms of the bill, FERC would have 12 months after receiving a complete application to make a decision on whether to approve or deny a natural gas pipeline certificate for any project.

It would also codify FERC’s requirement that any other agencies required to issue a license, permit or other type of approval for that pipeline would have an additional 90 days — able to be extended to 120 days, at FERC’s discretion — once FERC issues its final environmental document on the project to make their own permitting decisions.

If either FERC or any subsequent licensing authorities miss their deadline, approval would be granted automatically.  Delays to permitting have risen over the last decade, and the average processing time for an interstate natural gas pipeline project is now nearly 19 months, according to House Republicans, citing a February 2013 Government Accountability Office report.

A previous, nearly identical version of the bill passed the House in the last Congress in a similarly divided 252-165 vote, but was never taken up by the then-Democratic Senate.

The White House has already issued a veto threat against the latest bill, as it did for the previous version, saying that although it recognizes the need for more energy infrastructure and for timely consideration of project applications, it could not support that “rigid, unworkable timeframes” required by the bill.