Volume 4 -- Issue 38 -- October 11, 2007
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California Judge Blocks “No-Match” Rule
House Votes Against Death Tax Repeal and for Delayed Implementation of 3% Withholding
House Passes Bill to Establish National Affordable Housing Trust Fund

  California Judge Blocks “No-Match” Rule
Contractors urged to continue their efforts to comply with immigration rules and regulations and promptly to respond to “no-match” letters

The AFL-CIO and the business community have won a major if less than final victory in their lawsuit against the “no-match” rule that the Department of Homeland Security (DHS) announced on August 15, 2007.  The U.S. District Court for the Northern District of California has issued a preliminary injunction against that rule, blocking its implementation until the court can render a final decision on the merits of the case. 

The judge issued the injunction primarily because the rule – which DHS has entitled “Safe-Harbor for Employers Who Receive a No-Match Letter” – carries a significant risk of irreparable harm to both employers and employees, while further delay in its implementation would carry little if any risk of harm to the government.  The Judge also found that the plaintiffs had raised serious questions about the rationale for the rule, about the scope of the department’s authority, and about the department’s efforts to comply with the Regulatory Flexibility Act.
While AGC is encouraged by the ruling, the association continues to urge its members fully to comply with all immigration rules and regulations, and promptly to respond to any “no-match” letters that they receive from the Social Security Administration.  It appears that DHS still has the discretion to take a harder look at any employer that ignores a no-match letter, and to use such a letter as at least one piece of evidence of what an employer knew about an individual’s right to work in the United States.  
In meetings with AGC, DHS has made it clear that the department intends to step up enforcement of the law.  An employer that ignores discrepancies in social security numbers may therefore continue to run a risk of closer scrutiny.  How an employer has dealt with such discrepancies may continue to be at least one factor that DHS takes into account, as it assesses the totality of the circumstances surrounding an employer’s practices, and whether the circumstances justify finding that the employer has violated the law.  
AGC will continue to monitor the situation carefully, and to encourage both the legislative and regulatory changes necessary to effect truly comprehensive immigration reform.
For more information, contact Mike Kennedy at kennedym@agc.org or (703) 837-5335. 
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  House Votes Against Death Tax Repeal and for Delayed Implementation of 3% Withholding

The House of Representatives voted on two tax issues vital to AGC members Wednesday including legislation to delay the implementation of the 3% withholding for one year, and the permanent repeal of the death tax.

Attached to an unrelated tax measure was a one-year delay of the new law requiring 3% of every payment be withheld from all contracts with federal, state and some local governments.  Under current law, the withholding requirement begins on payments starting in 2011. The legislation to delay the implementation of the 3% withholding until 2012 passed by a vote of 212 to 173. 

AGC will continue to work for a permanent repeal by urging the House to vote on H.R. 1023. H.R. 1023 is bipartisan legislation with 218 cosponsors that would simply repeal the law.
During a procedural motion on the same legislation, Republicans brought up a measure to permanently repeal the death tax.  The tax is due to revert in 2011 to a 55 percent tax on anything over $1 million, an untenable outcome.  AGC key voted the legislation, urging a yes vote on the procedural motion, nevertheless it failed by 196-232.  AGC will continue to work for a permanent solution.

Click here to see how your member voted, and to read the letter AGC wrote to all House members.

For more information, contact Heidi Blumenthal at blumenthalh@agc.org or (202) 547-8892. [ return to top ]

  House Passes Bill to Establish National Affordable Housing Trust Fund

The U.S. House of Representatives Wednesday passed H.R. 2895, the National Affordable Housing Trust Fund Act of 2007.  The bill establishes a trust fund to provide housing assistance to low-income individuals and families. 

Money from the trust fund can be used for construction; acquisition of property; site preparation and improvement (including demolition); and housing rehabilitation, as well as towards rental and home ownership assistance.  The trust fund would be financed through Fannie Mae and Freddie Mac; surplus funds from the Federal Housing Administration; and Congressional appropriations.

For more information, contact Karen Bachman at bachmank@agc.org or (202) 547-4733.
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