The 108th Congress could produce tax relief for repairers. With multiple transportation initiatives being considered, it will be an active Congress for the aftermarket. There will be efforts to limit clean air laws. And Clean Air Act changes may put emissions testing programs at rish but nothing has been proposed to date to this regard. You can bet, though, that ASA will be closely watching climate change and clean air legislation.

The Automotive Service Association was recently invited to participate in a meeting held by President George Bush in Northern Virginia. At the meeting, Bush discussed his new economic stimulus package. The meeting was held at a small business located in Northern Virginia. The business, founded by a former firefighter, manufactures flags - including the flags flown on the president's limousine. The president emphasized that with his economic stimulus legislation this particular small business would be able to add equipment and increase its work force.

Bush showcased his new proposal at the Economic Club in Chicago. The 10-year, $674 billion plan is one of the most aggressive economic stimulus packages in this generation. Part of the proposal includes that tax breaks scheduled to occur in 2004 and 2006 be made effective in 2003. All tax rate reductions will be retroactive to Jan. 1. The president stated that he will direct the U.S. Treasury Department to adjust withholdings immediately. The following is an outline of the president's proposal:

• Marriage penalty reduced now, not delayed until 2009
• Taxpayers scheduled to move from the 15 percent bracket to the 10 percent bracket in 2008 would be moved this year
• In lieu of raising the child tax credit from $600 to $1,000 per child by 2010, it would be raised this year
• Abolishes taxation on stock dividends
• Increase expensing of equipment for small businesses from $25,000 to $75,000 and indexing that number to inflation.

House Democratic leaders unveiled their own proposal: a one-year, $136 billion tax initiative. It provides the following:

• $600 rebates to married couples
• Tax incentives for small business investment
• $31 billion to states for homeland security projects
• Medicaid and transportation costs.

Debate over how best to stimulate the economy will dominate the first part of the 108th Congress. Already, members of both parties are proposing changes to the president's plan. There will be opportunities for the repair community to improve certain areas of our tax position.

ASA has joined with other members of the Small Business Legislative Council to support a broader agenda of small business issues in addition to an economic stimulus package. These priorities include health care cost containment, tort reform, modernizing depreciation and expensing laws and reauthorization of the highway bill.

In addition to increasing the expense allowance for equipment, the rapid changes in technology require more timely write-offs. Updating these laws will increase opportunities for small businesses.

Health care costs rose to a record 14.1 percent of the U.S. gross domestic product in 2001. This growth in costs led to $1.4 trillion in U.S. health expenditures in 2001. These higher and newer costs for small businesses as they attempt to provide health care for employees are resulting in premium increases this year of 30 percent to 40 percent for small businesses and 17 percent for larger companies.

With a Republican Congress and president, tort reform may have the best chance for success it has had in a number of years. Abuse of the legal system has had a negative impact on the economy, increasing health care costs and reducing employment, thus productivity. This excessive litigation has been most evident in recent cases in California with the number of actions against repair facilities.

With the increase in litigation, insurance premiums will continue to rise and the luxury of "walk-outs," as seen recently in West Virginia where physicians "walked-out" over malpractice premiums, is not available to small business owners. Although Gov. Bob Wise of West Virginia has made a heroic effort to get doctors back on the job, moving any substantive tort reform legislation in West Virginia will be difficult.

There will be several major transportation bills moving in the 108th Congress including the Transportation Equity Act or Highway bill, the reauthorization of the National Highway Traffic Safety Administration, reauthorization of the Federal Motor Carrier Act and other bills Senate Commerce Committee Chairman John McCain, R-Ariz., intends to include for his committee's agenda.

Climate change and clean air legislation will also be closely watched by ASA. Emissions inspection programs have a possibility of growing geographically under current federal regulations. There will be efforts to limit clean air laws during the 108th Congress.

The 108th Congress could produce tax relief for repairers. Clean Air Act changes may put emissions testing programs at risk but nothing has been proposed to date in this regard. With multiple transportation initiatives being considered, it will be an active Congress for the aftermarket.

Bob Redding is the Automotive Service Association's Washington, D.C., representative. He is a member of several federal and state advisory committees involved in the automotive industry. For more information about the legislative activities of ASA, visit www.TakingTheHill.com.

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