Last week, IMA-NA held our annual Washington, DC, Spring meeting. One of the primary purposes of the meeting is to get our members in front of the decision makers on Capitol Hill. This year, our members made dozens of visits over a day and a half to key offices educating Members of Congress and their staffs on the need to maintain the percentage depletion tax deduction in any tax reform effort in 2017. Natural resources companies, such as IMA member companies, under current law, are allowed to claim as a deduction for depletion, a percentage of the gross income from their properties. This percentage varies depending on the type of mineral. The deduction recognizes the unique nature of resources investments, which require significant financial commitments to long-term projects where the resource itself is depleted over time. It allows our companies to deliver a competitive product at a low margin. We need to maintain this deduction because it allows companies to invest in land they need for future mineral reserves in order to keep their businesses sustainable; to make necessary capital expenditures; and allows the companies to make growth-oriented investments. IMA-NA staff will continue to work diligently on this effort throughout the year.
The other major issue our members discussed included the effort underway to reduce the federal royalty rate for soda ash mined on federal land from 6% to 2% for a period of five years. Market conditions have made this legislation vital for the industry. The combination of the strong dollar, currency manipulation in China and the subsidies provided by China to their manufacturers is negatively impacting our ability to be competitive in the global market place. Senator John Barrasso (R- WY) has introduced S. 2031, the American Soda Ash Competitiveness Act. The legislation is a bi-partisan bill with 5 Democrats and 5 Republicans supporting this effort. On the House side, Congressman Paul Cook (R-CA) has introduced a companion bill, HR 1992, which has passed out of the House Natural Resources Committee on a bi-partisan vote. IMA-NA is continuing to work with key members in the House and Senate to ensure that this vital bill moves forward this session of Congress.
Searles Valley Minerals President Avinash Puri and Director Government Affairs and Public Relations Arzell Hale meet with House Majority Leader Kevin McCarthy