Equipment Leasing Association Submits Written Testimony to House Ways & Means Committee Hearing Expressing Strong Opposition to Bush Administration Budget Proposals

Anti-Leasing Proposals Questioned

Arlington, VA——The Equipment Leasing Association (ELA), a non-profit association representing the $220 billion equipment leasing and finance industry, today submitted a statement to the House Ways & Means Committee to express its strong opposition to certain “anti-leasing” tax proposals in the Administration's FY 2005 budget.  The House Ways & Means Committee is conducting a hearing on Administration proposals that would negatively affect leasing to tax-exempt entities. 

ELA called attention to the following three serious consequences for tax-exempt entities as a result of the Treasury's proposals in the FY 2005 budget:

·        The options available to tax-exempt organizations for acquiring equipment and raising capital are reduced. This loss of flexibility makes efficient management more difficult. Strategies such as privatization and public-private financings will be severely limited.

·        The cost of acquiring equipment and raising capital will increase for tax-exempt entities. The results will include delayed or deferred capital expenditures, personnel layoffs and increases in fares / costs for services. 

·        Tax-exempt entities, organizations that make up a significant portion of the economy and provide needed services, will not have the necessary access to productive modern equipment.

In its testimony to the committee, ELA reiterated that the tax principles involved in leasing have been developed and reviewed by the Congress, successive Administrations and courts over decades in legislation, regulations and court decisions.

“No major policy change with such broad effect should be made without careful consideration of the impact on a significant sector of the economy: the people who rely on tax-exempt organizations for quality service, on a major financial services industry and on the manufacturers of equipment and software,” said ELA President Michael Fleming. The association also expressed its willingness to work with Congress as it considers legislation in the tax-exempt leasing area. 

“Congress has historically recognized that it is contrary to sound public policy for the cost of capital for cities, hospitals, public transit systems and other tax-exempts be substantially higher than that of private entities,” said Fleming. “We encourage the committee to continue to uphold the option of leasing for tax-exempt entities to stimulate investment in capital goods, and reject the Administration's poorly-conceived budget proposals.”

To get a copy of ELA's full statement to the House Ways & Means Committee, visit http://www.elaonline.com/GovtRelations/Federal/PDFs/ELATestimony.pdf