"We’re telling folks that if you want permanent repeal, support it now," says Heidi Blumenthal, the Associated General Contractors’ director of tax and fiscal affairs. AGC has made eliminating the estate tax one of its top priorities.

Senate lawmakers have felt pressure to forge an agreement to end the estate tax since the House passed a permanent repeal bill on April 13 (ENR 4/25 p. 9). President Bush also has urged Congress to push for repeal.

In 2001, Congress voted to phase out estate taxes by 2010. But, if the law is not made permanent, the tax rate in 2011 will revert to its pre-2001 level of 55% for estates worth more than $675,000. The House has voted for full repeal four times since 2001. Each time, the legislation has died in the Senate.

Sen. Jon L. Kyl (R-Ariz.), chairman of the Finance Committee’s taxation subcommittee is leading the GOP effort. Frontman for the Democrats is Sen. Max Baucus (D-Mont.), the ranking member of the finance panel.

Kyl and Baucus have reached agreement on "basic parameters" of a bill, says one Senate source. Key to any agreement is each side being able to deliver enough votes–60 in total–to avoid a filibuster. Kyl would not have agreed to any parameters if he did not think he had the GOP votes, says an aide. "So now it’s up to Baucus," the aide adds. A Democratic source says there are not 60 senators today who would vote for permanent repeal, but that a compromise is possible.

Key issues include the dollar threshold for exemption and the tax rate. While neither Republican nor Democratic aides would provide specifics, some sources say Kyl is leaning toward an $8-million personal exemption, indexed for inflation. Kyl also is pushing for a 15% tax rate, tied to the capital gains tax rate. That way it is not an arbitrary rate; it is tied to something solid, says one GOP source. But Democrats claim Baucus would never support a 15% tax rate. Sources also say Baucus supports a lower personal exemption, closer to $5 million. "I expect they can meet in the middle on the personal exemption," says one source.

While supporters were once hopeful a Senate vote could occur before the August recess, most agree now that Congress has more pressing matters to consider, including the upcoming confirmation process for the Supreme Court nominees. A vote on estate tax repeal likely won’t happen until fall, says one observer. But it won’t drag on another year because the business community is really pushing for it, says a GOP aide.

Transport Bill: Ninth Stopgap Could Be Needed on July 19
With House and Senate negotiators working to finalize a multi-year transportation bill before a July 19 deadline, some remain optimistic that a final pact can be reached on the $286.5-billion measure that funds highway and transit projects. The deadline is when funding for the eighth extension of the Transportation Equity Act for the 21st Century runs out. TEA-21 originally lapsed on Sept. 30, 2003.

"It is very unlikely things will be completed by July 19 so we’re looking at another short-term extension, probably through the end of the month," says an American Road & Transportation Builders Association spokesman. But a House transportation committee aide says progress is being made daily and it is premature to predict another extension.

EPA: Interstate Rule Is Challenged
North Carolina’s attorney general and four environmental groups have sued the Environmental Protection Agency to block its Clean Air Interstate Rule (CAIR). The lawsuit was filed July 8 in the U.S. Court of Appeals for the District of Columbia Circuit.

Loopholes in the rule will allow powerplants in other states to send additional pollution to North Carolina, argues Attorney General Roy Cooper. Specifically Cooper is concerned about EPA’s use of early reduction credits and allowance trading that effectively delay actual pollution reduction.

But Jeff Holmstead, EPA’s assistant administrator for air, claims CAIR "represents the strongest powerplant regulations in more than a decade." It would be unfortunate if lawsuits slowed implementation of health and environmental benefits, he adds.

Associations: Bill Eases ‘Do-Not-Fax’ Restrictions
Trade groups, including many construction and engineering associations, will have an easier time distributing facsimiles to their members. On July 9, President Bush signed into law the Junk Fax Prevention Act of 2005.

The measure allows firms to continue sending bulk faxes to parties with whom they have preexisting business relationships. But now an ‘opt-out’ clause must be included, allowing fax recipients to refuse future unsolicited faxes.

Compiled by Sherie Winston

ith Senate Republicans offering the first hint that they might consider a compromise with Democrats to permanently repeal the estate tax, construction supporters of eliminating the levy are optimistic their ship has finally come in.