Content about Congress

WASHINGTON — The Textile Rental Services Association’s Leadership & Legislative Conference concluded last week with more than 30 meetings with key figures in Capitol Hill offices. The sessions enabled company leaders to enlist support of members of Congress in advancing the industry’s most pressing government-relations causes.

Hill Day was the conference climax, following TRSA committee meetings and presentations at the Fairmont Washington, the first time in the event’s three-year history that all activities took place downtown. Attendance exceeded 130, a conference high. Operator (launderer) members outnumbered Associates (suppliers) by a nearly 3-to-2 ratio.

Sen. Lamar Alexander, the former Tennessee governor and two-time presidential candidate, primed attendees for their congressional visits immediately before their departure. Alexander offered his view of the nation’s fiscal crisis, noting that only 40% of government spending is budgeted each year. That portion of expenditures is at 2008 levels and is set to grow with inflation. The remainder is mandated by prior legislation (Medicare, Medicaid, Social Security) and is growing at three to four times inflation.

Issues TRSA members raised during the Hill meetings included competition from prison laundries, taxation of textiles as medical devices, and regulation of air emissions of volatile organic compounds from towel processing.

Following these meetings, participants regrouped at a Hill lunch spot to hear Rep. Mike Pompeo, a second-term House member from Kansas, who addressed the shop towel issue from his own perspective as a small business owner/operator.

The night before, at a TRSAPAC reception, Rep. Bill Huizenga of Michigan was honored as TRSA’s first-ever Legislator of the Year. He introduced 2012 legislation to level the playing field in competing with prison industries.

The industry-leadership portion of the agenda took place at the Fairmont March 18-19. Activities consisted mostly of committee meetings, where participants voiced their individual preferences for how TRSA should allocate resources. But the program included keynote speakers as well. Alex Castellanos, CNN political analyst, offered a cloudy forecast for clearing political gridlock in Washington. Alex Passantino, former head of the Labor Department’s Wage and Hour Division (WHD), gave participants pointers on overtime pay issues.

Randall Wentsel, Ph.D., senior managing scientist, Exponent Inc., explained the research his firm has conducted for TRSA that proves how reusable shop towels, foodservice napkins and healthcare isolation gowns are more sustainable than their disposable counterparts.

The Clean Show—formally the World Educational Congress for Laundering and Drycleaning—is scheduled for June 20-22, 2013, at the Morial Convention Center in New Orleans.

For more information, visit the show's website here.

ARDMORE, Pa. — Thanks to the 100% “bonus” depreciation write-offs created by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, many laundry and dry cleaning businesses are discovering that capital investments in equipment, machinery and other business assets are more affordable today than ever before. Remember, however, the 100% bonus depreciation write-off is available only for qualifying purchases made by laundry services and businesses in 2011.

Those that have hesitated or postponed making capital investments because of the recent economic downturn might now want to consider how the combined use of incentives and the 100% bonus depreciation can substantially reduce the cost of capital investments. Even funding those new-equipment purchases is easier—at least for a while.

Opting Out

Although the 2010 Tax Relief Act included the best terms ever for bonus first-year depreciation, namely a 100% write-off of the cost of qualifying property, not all laundry and dry cleaning businesses will find it desirable to use front-load depreciation deductions. While it is possible to elect out of bonus depreciation entirely, it is, at least for now, less certain that a laundry or dry cleaning business can step down from 100% to 50% bonus depreciation.

The prime example of a situation crying out for a laundry business to opt out of 100% bonus depreciation is one where there are about-to-expire net operating losses, the value of which would be lost if current-year income were reduced too much by claiming the maximum depreciation allowance. Similarly, a laundry or dry cleaning business that currently is, and in the recent past, has been in a low tax bracket and expects to be in a higher bracket in future years may want to defer depreciation deductions to offset future higher-taxed income.

An election to take a reduced bonus-depreciation deduction was specifically authorized under prior law, when a taxpayer could elect 30%—instead of 50%—bonus first-year depreciation. Until recently, however, it appeared that the only choice for a laundry or dry cleaning business that does not want 100% bonus depreciation was to elect out of bonus depreciation entirely. Now, the IRS has decided to follow Congress’ “General Explanation” for the 2010 Tax Relief Act and permit a step-down election from 100% to 50% bonus depreciation.

Discretionary Incentives

When it comes to a financial helping hand, the best opportunity for laundry and dry cleaning businesses investing in capital improvements may come in the form of discretionary incentives available at the federal, state and local level. Although many of these incentives require some level of job-creation or, at least, job-retention criteria be met in addition to capital investment, there are some notable exceptions.

The Federal New Markets Tax Credit, for example, provides a significant financial incentive for qualified investments made in certain eligible census tracts. Also, Delaware and Virginia offer cash grants based on future capital investment made by existing businesses without requiring a commitment to job creation.

It is the incentives offered by many local jurisdictions that often provide the most significant level of benefit for capital investment activities. Many municipalities have the ability to offer property tax abatement or tax increment financing as tools to encourage capital investment. The property tax-related incentives are typically long-term in duration and provide significant savings for making qualified capital investment.

Funding Based on Need

Last fall’s Small Business Jobs Act created the State Small Business Credit Initiative and funded it with $1.5 billion to strengthen state programs that support lending to small businesses such as laundries and dry cleaning operations (and small manufacturers). Designed to spur up to $15 billion in lending, January saw the first wave of awards to the states.

Under the State Small Business Credit Initiative (SSBCI), participating states will use the federal funds for programs to leverage private lending to help finance small businesses such as dry cleaning plants and laundries that are creditworthy, but that are not getting the loans they need to expand and create jobs.

Last year’s Jobs Act included other provisions designed to help small businesses obtain funding. Among that bill’s many provisions were several new—but temporary—funding programs, such as the U.S. Small Business Administration’s amped-up extension of its lending guarantee programs and fee reductions. In addition, increases in the maximum loan size for the SBA’s 7(a), 504, and microloan programs will help. The 7(a) and 504 loan program maximums would bump from $2 million to $5 million and the microloans would increase from $35,000 to $50,000. Loans made under the SBA Express program would temporarily increase from $300,000 to $1 million. Also included is a temporary allowance for small-business owners to use 504 loans to finance certain mortgages to avoid foreclosure.

The SBA’s CDC/504 Loan Program provides long-term, fixed-rate financing to acquire fixed assets (such as real estate and equipment) for expansion or modernization. It is ideal for small businesses requiring “brick and mortar” financing. Rather than commercial lending institutions, 504 loans are delivered via CDCs (Certified Development Companies)—private, nonprofit corporations set up to contribute to the economic development of their communities.

Gone but Hopefully Not Forgotten

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provided many opportunities designed to help businesses reap tax benefits for capital investments and provide funding for doing so. The 2011 tax year may be the optimal time to take advantage of the federal, state and local tax or financing incentives that encourage capital investments.

Under the right capital-investment scenario, a savvy business may be able to claim 100% federal bonus depreciation, New Markets Tax Credit, state investment tax credits and municipal property tax abatement on the same capital investment. Or, the laundry business may benefit from the soon-to-expire funding opportunities available today.

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LAS VEGAS — The Las Vegas Convention Center will host the world’s premier textile care expo for a fifth time when the 2011 Clean Show—officially the World Educational Congress for Laundering and Drycleaning—arrives on Monday for a four-day stay through Thursday.

ATLANTA — With a little less than a year to go, Clean Show 2011 has sold more than 50% of its exhibit space in the Las Vegas Convention Center, according to Riddle & Associates, the show’s longtime management firm.

WASHINGTON — UNITE HERE has rejoined the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) four years after it and several other unions broke away to form the rival Change to Win coalition.

“Our 265,000 members belong in the ‘House of Labor,’” says John Wilhelm, president of UNITE HERE.

FAIRFIELD, N.J. — The Textile Care Allied Trades Association (TCATA) is supporting the “Stop Employee Forced Choice Act” day, a Feb. 4 event in Washington, D.C., organized by the National Association of Manufacturers (NAM) to express opposition to the Employee Free Choice Act (H.R. 800, S. 1041), better known as the Card-Check Bill.

FAIRFIELD, N.J. — The Textile Care Allied Trades Association (TCATA) is joining in an effort led by the Coalition for Affordable American Energy (CAAE) to call for Congress to stay in Washington until it votes on legislation that opens off-shore drilling, enables oil-shale conversion and aids other supply-enhancing measures.

LAS VEGAS — When the red ribbon twisted silently to the floor Monday morning among boa feathers and soap bubbles, it signaled a milestone in the life of the Clean Show: It had officially turned 30.

Executives and board members from the six sponsoring associations, flanked by a bevy of beautiful showgirls, gathered at the exhibit hall’s main entrance to cut the ceremonial ribbon and welcome a steady stream of visitors to the World Educational Congress for Laundering and Drycleaning.

Clean, for short.

TULSA, Okla. — A Cintas Corp. employee working in the wash room was killed in an apparent accident here March 6, prompting several Democratic members of Congress to ask a federal agency to investigate alleged machinery safety hazards at the company’s industrial laundries nationwide.

Eleazar Torres-Gomez, 46, became trapped in an industrial dryer that was in operation. Other workers found his body 20 minutes later.