Washington wrap-up - 1991 annual report.

• Author: Field, Joanne
• Position: Government Finance Officers Association

With the Gulf War over and attention shifted to the domestic scene, Congress developed a major case of consternation as members struggled with limitations that they had imposed on themselves the previous year with the Omnibus Budget Reconciliation Act of 1990. Action was delayed on many bills because an acceptable offsetting revenue, required by that budget agreement, could not be identified.

During the final days of the first session of the 102nd Congress, concern about the lingering recession generated a flurry of proposals promising middle-income tax relief and economic stimulus. On the night before Thanksgiving, Congress finally went "over the river and through the woods," adjourning until January, although committees in both the Senate and House held hearings on tax proposals in December.

During 1991 the GFOA Federal Liaison Center focused on numerous proposals affecting state and local governments, including sales practice rules for government securities; protection of tax-exempt bond financing; tax code simplification; Social Security coverage for part-time, temporary and seasonal employees; tax-exempt bond regulations; revision of pension distribution rules; taxation of electronic fund transfer; and continuation of pass-through bank deposit insurance for Section 457 deferred compensation plans.

The following is a summary of major issue areas in which GFOA was involved with an explanation of how the issues were resolved or their current status.

Legislative Activities

Government Securities Act (GSA). GFOA is largely responsible in having Congress recognize the need for sales practice rules in the government securities market. In early May, John Bilafer, vice chair of GFOA's Committee on Cash Management, testified before th Subcommittee on Telecommunications and Finance on behalf of GFOA and five other organizations about the reauthorization of the GSA.

Two other GFOA representatives appeared before Senate and House sub-committees on the same topic. Senate action on S. 1247 reauthorizing the GSA of 1986 came in July, shortly after Robert Stout, finace director of Ridgefield, Connecticu, and a member of the GFOA Committee on Accounting, Auditing and Financial Reporting, testified before a subcommittee of the Senate Committee on Banking, Housing Urban Affairs on the need for sales practice rules in the trading of federal government securities. In September Richard B. Dixon, GFOA President and chief administrative officer for the County of Los Angeles, appeared before the Subcommittee on Oversight of the House Ways and Means Committee during hearings scheduled after the revelations about the admitted abuses of Salomon Brothers.

A comprehensive government securities reform bill was not intorduced into the House until the closing days of the session. Representative Edward J. Markey (D-MA), chairman of the Subcommittee on Telecommunications and Finance of the House Committee on Energy and Commerce, is the chief sponsor of H.R. 3927, which now enjoys bipartisan subcommittee support. The House bill extends the Treasury Department's current rulemaking authority until October 1, 1996, and provides authority for sales practice rules to be issued for both bank and nonbank brokers and dealers.

Although new relemaking authority expired with the GSA on October 1, there should be little resulting impact on investors. Regulations already in effect will continue, as will their enforcement.

Tax-exempt Bond Relief and Simplification. GFOA members were active in urging their representatives to cosponsor H.R. 710 and S.913, companion bills introduced by...