Today’s legislative issues are becoming more and more complicated and, in most cases, will require implementation through the rule making process. That is why more and more companies and associations are retaining a Regulatory Affairs group. Similar to a legislative affairs specialist or lobbyist, a regulatory lobbyist specializes in regulatory agencies within the federal, state or city agencies. The regulatory specialist also appears for clients before Administrative courts.
Administrative law forms an important part of most modern judicial systems. In broadest terms, administrative law consists of the legal frameworks surrounding government agencies and regulatory bodies. Within this branch of law, the most important feature is defining the extent of the powers of various government bodies.
Administrative agencies are created by government legislators in order to protect the public interest. Examples of such interests include food safety standards, construction codes, pharmaceutical industry regulations, Medicaid proscriptions and municipal waste disposal standards. Within the outlines of the law, administrative bodies have the power to create regulations, issue licenses, investigate suspected abuses, and enforce compliance.
An attorney specializing in administrative law might work either with an agency or with a company whose interests conflict with the agency. When working with the agency, the attorney provides a legal opinion on the validity of proposed regulations and rules, deals with complaints, and prosecutes violations of the agency’s statutes.
Companies working in highly regulated industries, such as health care or waste disposal, may also hire regulatory affairs specialists versed in administrative law to defend their positions. For instance, a regulator might rule that a particular company had not complied with the state’s waste disposal statutes. The company’s administrative attorney would then try to demonstrate either that the business did in fact meet the requirements of the statute, or that the particular regulation exceeds the authority of the agency.
The federal Administrative Procedure Act (APA) as well as similar state statutes govern the limits of their respective agencies in passing rules and regulations. APAs arose in response to the establishment of powerful federal and state agencies as a part of the New Deal. Both the federal APA and state counterparts ensure transparency and uniformity in the activities of government agencies.
Duane Morris Government Strategies LLC (DMGS) is comprised of 19 experienced professionals representing clients at the federal, state and local levels. The firm operates in eight offices including Newark, NJ; Trenton, NJ; Harrisburg, PA; Philadelphia, PA; Pittsburgh, PA; Washington, D.C.; Albany, NY; and Columbus, OH. DMGS commenced operations as an ancillary business of international law firm Duane Morris LLP, one of the 100 largest law firms with more than 700 attorneys in 20 offices in the U.S. as well as in the UK, Saudi Arabia and Asia.
About Martin Milita: Beginning his career as a Legislative aid to US Congressman Edward George Biester, Jr. Martin Milita has a broad range of experience from both the public and private sectors. As a Senior Director with Duane Morris Government Strategies, Martin Milita brings a background in administrative law to his position, first as the New Jersey State Deputy Attorney General and then as an attorney for Sills Cummis & Gross P.C. and Riker Danzig Scherer Hyland & Perretti LLP. This expertise informs his activities with current clients, which include public and private entities ranging from the local level to Fortune 500 corporations.
Last Monday, Treasury Secretary Jack Lew stated that the Obama administration is close to reaching a final decision on what action can be taken to discourage U.S. companies from moving their legal address abroad to avoid domestic tax rates, a process known as “corporate inversions”. Lew said that the administration’s decision would come “in the very near future.” “Any action we take will have a strong legal and policy basis but will not be a substitute for meaningful legislation — it can only address part of the economics,” said Lew. “Only a change in the law can shut the door, and only tax reform can solve the problems in our tax code that leads to 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.
However, only targeted legislation that reduces the incentives and ability of firms to invert can truly protect the corporate tax base. Possible responses include allowing U.S. corporations to invert only if they truly become a foreign firm. This means current shareholders of the U.S. firm would have to own less than 50 percent of the new merged foreign firm, compared with the currently legislated 80 percent threshold. Additional measures that would likely be required to prevent inversions from further eroding the corporate tax base include preventing the practice known as “earnings stripping” and preventing corporations from using tax-deferred offshore cash in ways that benefit U.S. shareholders without paying U.S. taxes.
Despite the often vitriolic debate, when it comes down to the hard numbers, corporate inversions don’t appear to currently create a significant drain on U.S. tax revenue. The Joint Committee on Taxation projects that the U.S. would lose about $19.5 billion in tax revenue from 2015 to 2024 because of corporate inversions. Although that’s a considerable amount, that’s only 0.4% of the $4.5 trillion U.S. budget over the same time period, as the Tax Foundation notes. So is this “much ado about nothing”-at least not much?
Martin Milita is currently a Senior Director with Duane Morris Government Strategies, LLC, a full-service government affairs firm in DC, PA., NJ and Ohio. Duane Morris Government Strategies, LLC ., deals regularly with a myriad of complicated federal and state tax law matters, such as federal unrelated business income and compensation issues in the exempt organization realm, and state law sales and property tax exemption questions, which have gained national attention during the past few years. The Duane Morris Government Strategies team is well-equipped to lead clients through the maze of tax regulations and find solutions that add value, whether as part of routine tax planning or in connection with a change in public policy.
Feds to Reduce Scrutiny of Highway, Bridge Projects
The Federal Highway Administration (FHWA) announced recently that it plans to loosen its restrictions on federal grants given to states to help fund new transportation projects, thus giving states more leeway on how to build highways and bridges. Since the 1990s, FHWA mandated that states conduct a cost-benefit analysis on any highway improvement project that came with a price tag higher than $25 million. The same rules applied for bridges that would cost more than $20 million. Now, however, FHWA is raising those cost levels: Highway projects will only require an analysis if a state intends to spend more than $50 million, and bridge projects will only require an analysis if a state intends to spend more than $40 million. This rule change will only apply to highways and bridges that are constructed with the help of federal grant funding.
Martin Milita is a Senior Director of Duane Morris Government Strategies. Martin Milita provides public affairs services to Fortune 100 companies, privately-held firms and nonprofit organizations providing strategic advice to clients in the areas of legislative and executive branch lobbying, business development, procurement, issues management and business-to-government outreach. Martin received a J.D. from Temple University School of Law and is a graduate of King’s College. He is a member of the Pennsylvania and New Jersey Bars.
Duane Morris Government Strategies has secured millions in non-dilutive funding, successfully obtaining grants as small as $5,000 and as large as $2.5 million. DMGS is uniquely qualified to provide Grant Strategies Services given the team’s provision of grant writing and related consultant services at various levels of government as well as with private foundations for health care organizations in the areas of infrastructure, research and development, information technology, emergency management/public safety, energy, sustainability, and education, among others. Duane Morris Government Strategies professionals have combined grant and earmark experience with a number of national leaders in transportation. In addition Duane Morris Government Strategies offers development finance consulting and local, state and federal government affairs consulting.
Introduced on Monday this New Jersey Bill would ban the award of state contracts to American companies that reincorporate abroad to avoid U.S. tax obligations (Assemblyman Troy Singleton, D-Burlington, sponsor of A3624).
Separate measures in the state Assembly and state Senate would leave inverted domestic corporations ineligible to receive state contracts or subcontracts for goods, services or construction projects. The bills, which also include S2361, define an “inverted domestic corporation” as “a corporation incorporated or previously incorporated in the United States that becomes or has become incorporated in a foreign country or that becomes or has become a subsidiary of a corporation incorporated in a foreign country, primarily for the purpose of avoiding United States taxes.”(Shirley Turner, D-Mercer, Sponsor S2361)
Both measures task the state Treasurer with determining whether a bidder meets that definition, which would include considering whether a corporate restructuring has slashed the company’s federal tax liability, whether the bulk of the company’s operations and assets are in the United States and whether U.S. shareholders own at least half of the company.
The sponsor of the Senate bill, Shirley Turner, D-Mercer, is among lawmakers who are advocating for related restrictions that Singleton suggested could form a comprehensive response on the part of the state to corporate inversions.
Turner is also sponsoring legislation, S2397 that would bar inverted companies from receiving state economic development grants and other financial aid. That includes the reimbursement of taxpayer-subsidized programs such as Medicaid, the lawmaker said Tuesday. Another Turner-sponsored bill, S2398, would bar the state from making pension fund investments in companies that have shifted their tax homes outside of the United States. Assembly members Bonnie Watson Coleman and Reed Gusciora, both Democrats who represent parts of Mercer County, are sponsoring identical measures in their house, as well as another bill blocking inverted companies from receiving state contracts, according to the Legislature’s website.
In recent weeks, several federal lawmakers have offered reform proposals — chief among them Sens. Dick Durbin, D-Ill., and Charles Schumer, D-N.Y., who want to limit so-called earnings stripping, where a U.S. subsidiary can take tax deductions on debt owed to a foreign master company, and Sen. Carl Levin, D-Mich., who wants a two-year moratorium on inversion deals.
On Sept. 8, U.S. Secretary of the Treasury Jacob Lew implored lawmakers to enact a retroactive ban on inversions and said his department will soon decide how to block the transactions.
Martin Milita is senior director with Duane Morris Government Strategies, a public policy consulting firm affiliated with the international law firm Duane Morris LLP. In addition to legislative, executive branch and grassroots lobbying, Martin Milita has successfully advised individuals and corporations on billions of dollars in public procurement’s.
No one can deny that fracking holds enormous potential…
Experts estimate that this technique for harvesting natural gas from shale will add almost 50% to known recoverable natural gas resources and around 11% to known oil reserves around the world.
Fresh water, the most precious natural resource in the world, is a necessary component for fracking. Many scientists believe that we’re running out – something that would prove to be catastrophic. What’s perpetuating this idea of a water shortage is the fact that most shale plays are in very dry parts of the country. According to the Ceres Investor Network, of the 40,000 fracking operations put in place over the past three years, three quarters are located in areas where water is scarce, and nearly 55% are in areas experiencing drought. Fracking is particularly prevalent in California and Texas, the most water-challenged states in the country. While the drought in Texas isn’t as bad this year as it has been, California is on the verge of becoming a desert once again. Plus, fracking in Texas and other states is expected to double in the next five years, while aquifer levels in plays like the Eagle Ford formation in the southern part of the state have dropped by hundreds of feet over the past few years. Indeed, nearly 100 billion gallons of water are used annually for fracking operations, half of which is used in Texas alone. And that may seem like it’s a major strain on our water supply. What most people don’t realize, however, is that this pales in comparison to the trillions of gallons used for farming and personal needs. Farmers in places like California use more water than anywhere else in the country. The almond industry in that state alone uses a staggering 1.1 trillion gallons of water a year.
Since two of the major oil and gas fracking states also happen to be in the two most populous states in the United States – and those two states are also in a drought – water is becoming a concern.
This will play well for regions that are less populated, like the Bakken Shale in North Dakota, where the population of the entire state uses less water in a year than Manhattan. Recycling water is also an option, but the cost benefits are negligible compared to using fresh water.
Thus, water competition among farmers, residents, and the oil and gas industry will rise in the coming years, leading to higher production costs in the states that are most drought stricken.
Martin Milita joined Duane Morris Government Strategies, LLC, in 2012 as a senior director. In this role, Martin Milita has participated in a number of important public policy matters, including discussions involving hydraulic fracturing in New Jersey. Lawmakers in New Jersey have renewed their efforts toward mitigating environmental damage caused by the drilling process referred to as fracking. Also known as hydraulic fracturing, the practice of fracking involves drilling deep into the earth and releasing fluids to create cracks in shale rock, releasing the natural gases trapped inside. The large amount of water used during the fracking process is just one of the environmental issues that have been