Washington Report: A Friend in High Places

by Craig Piercy

When Mitt Romney announced his running mate, most Americans had never heard of him. However, for many in the concrete pumping industry watching that hot Saturday morning in August, the GOP vice-presidential nominee was already a friendly and familiar face. The Congressman from Wisconsin has been a longtime supporter of the concrete pumping industry and a key ally in our fight against unfair federal excise taxes on concrete pumps.

The story starts in the summer of 2002, when the IRS quietly published a notice that it intended to completely eliminate the so-called Mobile Machinery Exemption. The provision, which had been in place in one form or another since the creation of the national highway system in 1956, exempted certain types of jobsite equipment. These exemptions included mobile concrete pumps from federal highway excise taxes, the 12 percent federal retail excise tax, and the annual heavy use levy (up to $550). The rationale for the exemption was simple: Congress had always intended that federal excise taxes should apply to commercial vehicles whose owners were conducting commerce over the public highways, not jobsite equipment that made incidental use of them. In 2002, the Mobile Machinery Exemption was saving the U.S. construction industry over $400 million each year.

By the time the construction trade associations got wind of IRS’ move to kill the MME, there were scarcely more than 30 days left in the public comment period. ACPA quickly jumped into action and joined its industry counterpoints to form the Mobile Machinery Coalition (and contracted a Washington based government relations firm to do the lobbying, who in turn put the author in charge of the effort).

Topping our priority list was developing congressional opposition to the proposal. We immediately made the rounds of the House Ways and Means Committee members to find someone willing to lead the charge. Eventually we landed in the office of a young, second term congressman from the suburbs of Milwaukee where, as fate would have it, the headquarters of Putzmeister America is located. Congressman Ryan took to the issue immediately, as his family had operated a successful earthmoving business over four generations. Known today as Ryan Incorporated Central, this company was originally founded in 1884 by Ryan’s great grandfather Patrick Ryan, who used his team of mules to build embankments for railroads in Wisconsin.

Ryan drafted a letter of opposition to the IRS, and personally took it to the House floor where he convinced over 80 of his colleagues to sign it. Letters like this usually serve to establish the basis for future legislative action; they don’t often achieve their intended purpose immediately. However in this case, the Ryan letter, combined with similar correspondence from the Senate Finance Committee leaders Charles Grassley (R-Iowa) and Max Baucus (D-Montana), caused the IRS to delay action on the proposal until Congress has had the opportunity to review the issue during the upcoming reauthorization of the highway bill.

Ryan didn’t wait for the Highway Bill reauthorization. In 2004, he teamed with Senator Orrin Hatch (R-Utah) to codify the MME into law as part of the American Jobs Creation Act (P.L. 108-357). As a direct result of Ryan’s efforts, concrete pumpers across the U.S. have been spared from paying thousands of dollars in unfair and unnecessary federal excise taxes.

The ACPA still has unfinished business in this arena. The 2004 legislation limited the fuel portion of the exemption to equipment that travels fewer than 7,500 miles per tax year on the public highways. Congress’s intent was to limit the exemption to “classic” mobile equipment. This legislation also aimed to weed out vehicles such as small utility and tree trimming vehicles that spent most of their time on the public highways, and many were configured to transport loads over them. However, many concrete pumps got caught in the dragnet and forced to pay tax on 100 percent of their fuel, even though a majority of it was consumed in off-highway jobsite operations. In addition, the ACPA continues to fight back against efforts to subject concrete pumps to the 12 percent Federal Retail Excise Tax.

Of course I’m biased, but I think the pumping industry’s background with leaders like Paul Ryan underscores the need for ACPA to continue to be involved in the federal policymaking arena. Yes, the last few years have witnessed an unprecedented period of congressional gridlock that makes it ever harder for trade associations like ACPA to accomplish its legislative objectives. However, there are still valuable/useful/etc. people in political Washington who understand the importance of the construction and concrete pumping industry to our overall economy, and will stand with us when gridlock yields to action.

Thanks to Wisconsin election law, Ryan is allowed to run for House reelection, while also being on the presidential ballot. So it seems that no matter the November election outcomes, he is planning to be around for quite some time.