COMMITTEE REPORT

FALL FORUM APPROACHES

NCSL’s Fall Forum will be held December 8-10 in Savannah, Georgia. The Economic Development, Trade & Cultural Affairs Committee will conduct sessions with the Agriculture & Rural Development and Financial Services Committees on the Community Reinvestment Act and other banking issues affecting economic development. Other discussions will be held on small business development, procurement issues, trade agreements, and historic preservation. The opening plenary will feature a review of the 2004 Election by Larry Sabato, Director of the Center for Politics at the University of Virginia. Special briefings will be held to discuss federalism and preemption, homeland security, and addressing the shortage of health care workers. Pre-conference seminars will be held December 7 on transportation and health issues. Information about Fall Forum registration, hotel accommodations and sessions for all Standing Committees is at www.ncsl.org/programs/seminars/forum/index.htm.

NAFTA PANEL AGAIN OVERTURNS U.S. CASE AGAINST CANADIAN LUMBER

On August 31, a NAFTA panel handed Canada perhaps a final victory over the U.S. by ordering the International Trade Commission to revoke its antidumping and countervailing duty cases on softwood lumber. The ruling can be appealed to an Extraordinary Challenge Committee; however, the basis upon which an ECC can reverse a panel decision is extremely limited. Since May 2002, the Coalition for Fair Lumber Imports (CFLI) has contended that Canadian provinces are subsidizing the Canadian timber industry which is then dumping cheap lumber into the U.S. market. Groups including the National Association of Home Builders and The American Consumers for Affordable Homes (ACAH) applauded the decision. The NAFTA panel decision is online at www.nafta-sec-alena.org/app/DocRepository/1/Dispute/english/NAFTA_Chapter_19/USA/ua02072e.pdf.

HUD RESTORES $156 MILLION TO SECTION 8 VOUCHERS

On September 3, the Washington Post reported that the Department of Housing and Urban Development was restoring about $156 million to Section 8 vouchers after reviewing public housing authorities' appeals of a decision in April to cut funding. The money will be distributed to most of the housing authorities who appealed. NCSL weighed in on HUD’s funding cuts in April 2004 via an action resolution and a letter to HUD Secretary Alphonso Jackson, online at www.ncsl.org/standcomm/scecon/section8ltr0604.htm.

STATES WEIGH IN ON MACHINERY TAX CREDIT CASE

The Gongwer News Service reported on September 30 that Attorneys General from Kentucky, Michigan and Tennessee have filed legal briefs in support of Ohio’s corporate franchise tax credit for machinery and equipment purchases. The 6^th Circuit Court ruled the tax credit in violation of the Commerce Clause of the U.S. Constitution, stating that Ohio had overstepped its bounds in taxing interstate commerce. It is anticipated that the Economic Development, Trade & Cultural Affairs committee will discuss this issue in a joint session with the Labor & Workforce Committee at the 2005 Spring Forum in Washington DC.

SENATE CLEARS $137 BILLION CORPORATE TAX BILL

Prior to adjourning for the 2004 Election, the U.S. Senate voted 69-17 and the U.S. House voted 280-141 on a $137 billion corporate tax overhaul package, HR 4520. The measure repeals an export tax break that has been deemed an unfair trade subsidy by the World Trade Organization. It would replace the $50 billion export subsidy with $137 billion in new tax breaks, offset by an extension of U.S. Customs fees and a crackdown on various tax avoidance schemes. More than 20 new tax breaks, totaling $43 billion over 10 years, would go to U.S.-based multinational corporations for their overseas income. President Bush signed the bill on October 22.