Will the sun set on legislation?
A host of political issues - including health care and product liability reform - could impact industry in 2000
By Victoria Fraza -- Industrial Distribution, 1/1/2000
WASHINGTON--While the Presidential election will take center stage this year, there are several issues on the legislative agenda that could grab distributors' attention.For those who've been around the industry for more than a couple of years, the list of pending issues may sound familiar. Indeed, product liability, inside sales reform, and the "death tax" are topping the to-do lists of many industry trade groups once again. But new concerns over health care reform and a late-breaking ergonomics proposal by the Occupational Safety & Health Administration could shake things up this year.
Of course, just how much progress will be made on those issues is questionable, given that 2000 is an election year. But industry watchers are hopeful there may be some action on inside sales reform and possibly the health care issue when Congress reconvenes later this month.
Ron Reese, senior director of government relations for the National Assn. of Wholesaler-Distributors, is confident that inside sales reform will be part of a minimum wage package scheduled to be brought before the House by Rep. Rick Lazio, R- N.Y. The Senate passed a similar version late last year that did not contain inside sales reform, but Reese is confident the final package is more likely to resemble the House version.
The inside sales proposal would exempt many inside sellers from wage and hour laws that now require distributors to pay them overtime. The proposal instead would allow distributors to pay inside salespeople based on salary and commission structures. Gary Buffington, executive director of the Industrial Distribution Assn., agrees that it's time action be taken on the issue.
"We would like to have seen something done about inside sales reform [in 1999]," Buffington said. "I gather that it will be re-introduced this year with legislation to increase the minimum wage. There seems to be some possibility of action on that."
In the health care debate, considerable attention has been paid to the Patient's Bill of Rights, re-launched early in 1999. Bills were passed in both houses last year and a conference committee has been appointed to try and iron out the differences. Both bills address a range of private health care issues.
Opponents are critical of the bills' mandates, saying they will contribute to increased health care costs. Jim Anderson, vice president of government relations for NAW, also points to a provision in the House bill that would expand the liability of health care providers and allow patients to sue their plans based on benefits decisions. Supporters view the proposal as a boon for patients, but others say it would likewise lead to increased costs for employers and employees.
"It's a real disincentive to employers to continue to offer health insurance to employees," Anderson says of the expanded liability provision. "We are very concerned about what the bills will do in terms of increasing the cost of health insurance coverage ... and the impact in terms of increasing the number of uninsured Americans."
Anderson says the outcome of the conference committee is "clearly in doubt."
"It's not clear that the conference will ever reach an agreement at all," he said. "But this will be one of the dominant issues."
Another dominant issue will be OSHA's new ergonomics proposal, released in late November. The proposed standard is aimed at reducing repetitive stress and other related injuries.
"This is the big sleeper," says Michael Moore, NAW chairman and former owner of Invetech. "It sort of snuck up on us ... There's probably not a lot of knowledge in the distribution community about this."
A less volatile issue is product liability, which has been on the table for years. Bills introduced in both the House and Senate last spring address the issue. While the outcome is unclear, the subject remains a high priority for many industry trade groups.
"The short answer is, product liability for wholesalers and distributors remains on the table in the same form we've been looking at for years now," says Anderson.
Tax reform is another issue distributors will be watching in the year ahead -- specifically estate tax relief, commonly referred to as the "death tax." The death tax was part of a Lazio bill brought to the House during the last few weeks of the 1999 session. While many conservative groups would like to see an outright appeal of the death tax, most have moved away from that stance and are now pushing for a reduction in the tax, which is charged to property and businesses that individuals or families pass down to other family members.
"We are hoping there will be some sort of tax reform," says Moore, who also sits on the board of directors of Applied Industrial Technologies. "That's a big issue for the distribution community."
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