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Legislative Update
 

Tax Reform - Working, Watching, and Winning

At the end of last month, I was joined in Washington, D.C. by Jerry Simmons of the National Association of Royalty Owners for two days of meetings on Capitol Hill focusing on preserving percentage depletion. As members of both NSWA and NARO know, our Associations have been deeply engaged in the fight to protect percentage depletion from attacks by both the right and the left in Washington.

Our meetings were scheduled in the shadow of the ongoing discussions on comprehensive tax reform. Although we had heard early reports that the House Committee would be starting from a point of protecting percentage depletion, our goal was to meet with leaders, make our case and confirm that we are making progress.

We had meetings with both Rep. Marchant (R-TX) and Rep. Lynn Jenkins (R-KS & NSWA Legislator of the Year 2015) who are two of our key champions on protecting percentage depletion. These meeting were a combination thanking them for their hard work and gathering information on where we need to focus our efforts. Both of those meetings confirmed the news we had been hearing; the Committee, specifically the energy working group focusing on assembling the energy tax portions of tax reform, was starting from a position of protecting percentage depletion. With this information in hand we did a series of other meetings on both the House and Senate side sharing news, building support around our joint effort of the Percentage Depletion Coalition, and trying to identify additional champions.

So what does this mean? I am pleased to report that we are WINNING the battle to preserve percentage depletion, BUT...we certainly haven't won yet. Since percentage depletion is an existing law, we are always fighting defense. However, for the first time in a long time, we have turned the tide. While the beginning discussions are starting with the premise of preserving percentage depletion, there is still a long road ahead for tax reform. 

So far this year the House has been leading the discussion on tax reform. Using the Republican "Better Way" blueprint, Chairman Brady and Speaker Ryan have been working to create a plan for tax reform. Meanwhile, the President is preparing his own plan which should come from the Treasury Department soon, and the Senate leadership is waiting to see what develops. The major fights in tax reform will be international taxation, which will generate the revenue for broader business tax reductions and personal rate reductions, and impacts on pass-through entities, which NSWA will monitor closely. 

As all this action continues this year, know that NSWA and NARO are leading the fight, organizing the Percentage Depletion Coalition, and working to protect you and your interests in Washington.