April 17, 2014 - April 23, 2014
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Governor O’Malley Signs More Than 100 Bills, Including Pre-K Expansion  


By Lyle Kendrivck
Capital News Service

Laurel– Picture this: a major blizzard has knocked out communications throughout the state. Network security professionals are scrambling to bring relief to afflicted Marylanders, but a team of nefarious hackers have united to thwart their efforts.

Fortunately, it’s just a game, but the real-world implications are huge.

On Friday and Saturday, the CyberWatch Mid-Atlantic Collegiate Cyber Defense Competition turned Johns Hopkins Applied Physics Laboratory into a cyber battleground. This year’s theme is “Operation Cyber Blizzard.” Eight teams from colleges in Maryland, Virginia, West Virginia and Pennsylvania scramble to keep networks secure and ensure aid is administered to distressed — albeit fictional — citizens.

While the disaster may be fake, the students’ enemy is much more real. The college teams’ opposing hackers, or “Red Team,” is populated by computer security professionals using both hi-tech and low-tech methods.

As the red team launched sophisticated cyberattacks, one hacker walked unnoticed with a backpack into the “pit” where the school teams congregate during the competition. He seemed innocuous, but Charlie Frick, a Johns Hopkins cyber researcher and event volunteer, said that backpack was full of antennae gathering information about the defenders’ networks.

The scheme worked: No student noticed the intrusion.

The collegiate “White Teams”, all clustered around tables in a separate room from the red team, felt the pressure.

“It’s intense…you really have to multitask,” said Eileen Hindman, a senior at Radford University in Virginia.

The Red Team got deep into student networks quickly, further flustering the students.

“It’s a little hectic … I thought it would be smoother,” said Felix Guerrero, a junior at Towson University.

Some students’ efforts to maintain security bordered on paranoia. Keegan Moore, a sophomore from Laurel’s Capitol College interrogated an innocent volunteer to ensure he wasn’t a Red Team spy, only relenting when Frick verified his identity.

But members of the Red Team welcome the chance to switch sides after playing defense for most of their professional careers.

“I’m having a blast,” said Sean Pierce, a red team member and technical intelligence analyst for Virginia-based iSight Partners. “It’s fun and easy to attack. There’s no pressure.”

The complexity of the scenario leaves each college with a plethora of tasks to juggle. Networks have to be maintained and secured, but much like the real world, critical functions can’t just be shut down to deal with threats.

On top of that, there are phony elected and corporate officials to please. For example, Costis Toregas, a cybersecurity professor at The George Washington University, plays the role of a county executive who will grill team captains, demanding better performance in areas that teams may have neglected.

“Sometimes cybersecurity is contained within the technology silo,” Toregas explained. The simulation of added demands from government and business creates a more realistic environment and forces teams to learn “business acumen” that computer science classes may gloss over, he added.

The winning White Team will compete in a national tournament in San Antonio next month, but cybersecurity firms are eyeing potential hires from day one. During the competition weekend, a career fair gives students a chance to talk to employers one-on-one.

“We have a really unique perspective on the growing need for cyber talent,” said Jennifer Havermann, engineering manager for Raytheon, a security corporation and sponsor of the event. She added that competitions like this give students the opportunity to practice valuable skills that classrooms can’t teach.

Dustin Shirley, a member of Anne Arundel Community College’s team, agreed.

“This is the best learning tool for students,” Shirley said. The competition offers a chance to apply skills, whereas “in the classroom, you get PowerPointed to death.”

And despite the stress of the challenge, the atmosphere in the pit and the Red Team’s base is casual. The Red Team is blasting loud electronic music. Cans of energy drinks and snack food wrappers are scattered across White Team tables. Unallocated Space, a Severn-based technology education center, brought a modified Ms. Pac-Man machine that lets non-competitors play a number of classic arcade games.

For the student teams, camaraderie and communication are critical. Teams like Anne Arundel’s have spent months refining their techniques, and members said that team chemistry has formed naturally.

“We can sense stress … we help each other out,” Shirley said, grinning.

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Chesapeake Bay Impact Crater Adds to Sea Level Rise



By Brian Compere
Capital News Service

COLLEGE PARK — Scientists say sea level rise is occurring at a faster pace in the Chesapeake Bay region than the global average, and the dramatic formation of the bay itself is a significant reason why.

About 35 million years ago, a meteorite collided with

the Earth near the current location of the mouth of the bay, where it transitions into the

Atlantic Ocean. The impact left a crater more than 55 miles wide, setting events into motion that eventually led to the formation of the bay about 3,000 years ago.

When the meteorite hit, it created a giant hole into which loose materials flowed. This replaced harder rock layers from before the impact with much softer, less compacted dirt, said Curt Smith, regional planner for Virginia’s Accomack-Northampton Planning District Commission.

Since then, this softer material has slowly compacted together, shifting downward. Because of this, the land near the crater is slowly sinking.

Land around the bay has been slowly sinking for millions of years, but nobody has determined exactly how much of this is due to the crater, said Ward Sanford, a United States Geological Survey hydrologist. Smith said the crater is definitely one reason this area is experiencing the fastest rates of relative sea level rise on the East Coast.

Relative sea level rise, which takes both rising sea levels and sinking land into account, averaged 3.9 millimeters per year, according to USGS data collected from four stations in the southern Chesapeake Bay until 2006. The global average sea level rise is 1.8 millimeters per year, according to a USGS report released in December.

Another effect that can contribute to sea level rise is the withdrawal of underground water supplies. If the amount of groundwater decreases, the weight of rock layers above the groundwater compacts softer layers downward, Sanford said. This can amount to centimeters of change over decades.

About 80 percent of sinking land nationwide is caused by groundwater withdrawals, according to USGS data.

Smith said the crater also appears to have influenced path of the James River and other rivers near where they meet the outer rim of the crater.

The crater was discovered relatively recently. But many others came across hints of its presence long before geologists Scott Bruce, David Powars and their colleagues helped piece together the hints to reveal the crater. Bruce and Powars wrote an article for Virginia Explorer in 2000 about the history of these accidental interactions with the crater.

In 1864, Union soldiers at Fort Monroe near the mouth of the James River drilled a 907-foot well that drew salty water from inside the crater. More wells were drilled and more studies of groundwater supplies and other subsurface characteristics were done over the next decades. But Powars — working for USGS at the time — Bruce — then a groundwater geologist with the Virginia State Water Control Board — and their colleagues didn’t get close to the discovery until 1986.

“On a hot August night, Don Queen (USGS driller) and Jay Owens (SWCB assistant driller) extruded a section of core that resembled none other taken in Virginia,” Powars and Bruce wrote in the Virginia Explorer article. “The next day, in better daylight, Powers, Bruce, and Steve Schindler puzzled over the atypical composition of the core. At one point, David Powars jokingly commented, ‘Wouldn’t it be cool if this was from a meteor impact?’ Everyone roared with laughter.”

Later, Powars got seismic data of the bay region from Texaco in 1993 that showed evidence of the crater, supporting the theory of a meteor impact.

Although hints of the crater had been discovered since as early as 1864, it wasn’t until the Texaco data was analyzed that the crater’s existence was definitively confirmed.

“Any time you come up with something new and they all think ‘how could you possibly know?’ they laugh at you,” Powars said. “When I got the eureka point, once I had figured that out, I knew I could defend it against anybody.”

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Dominion’s Gas Export Plan Divides Maryland Town


By Justine McDaniel
Capital News Service

LUSBY - To some in the town of Lusby, Dominion Resources is a good neighbor that provides jobs, revenue and community support.

To others, Dominion is a Goliath whose plan to export natural gas from its Cove Point facility on the Chesapeake Bay could bring environmental and safety hazards.

Dominion’s proposal to begin exporting liquefied natural gas (LNG) from its import facility has put the company and the tiny town at the forefront of a national debate about natural gas, a booming commodity that some say could alter the global energy landscape.

The issue has created a sharp divide in Calvert County and across the state. The debate has been gathering steam since early last year, and as the wait for an oversight assessment from the Federal Energy Regulatory Commission (FERC) drags on, the controversy is only intensifying amid a swirl of misinformation and frustration.

“I’m terrified,” said Mary Ward, who lives down the street from Cove Point. “It’s going to change a lot of things around here.”

Ward and others worry about the facility’s proximity to homes and are dubious about Dominion’s safety claims. But some residents aren’t concerned.

“I don’t really see a threat in it. I mean, gas has been coming in; now gas is going to come in and go out. So what’s the change?” said John Miller, a military contractor who lives off Cove Point Road.

A National Debate…

This scene could soon become familiar across the U.S., where LNG export projects are underway in Louisiana, Texas, Oregon, Georgia and Mississippi, according to the American Petroleum Institute. Cove Point’s application to export to non-free trade agreement countries is one of seven approved by the Energy Department, with 23 more under review.

If Virginia-based Dominion gets final approval, it would be the second such U.S. facility in operation by the time it began exporting in late 2017. (Sabine Pass LNG Terminal in Louisiana, slated to start operating in 2015, will be the first.)

Proponents of exporting say natural gas could lower carbon emissions worldwide while increasing U.S. energy independence. It would allow other countries to avoid buying fuel from less stable countries, be profitable for some U.S. businesses and provide clean-burning energy, said Steven Gabriel, a University of Maryland professor in energy modeling and energy policy.

In the wake of the crisis in Ukraine, the U.S. could be well positioned to cut into Russian exports of natural gas to Western Europe.

But environmentalists say natural gas is just as bad as coal when the entire process, including drilling, compressing and shipping, is taken into account, especially given methane leaks that often occur during the process. They also argue that natural gas competes with renewable energy sources like wind power.

The Dominion project, they say, would hurt the climate and change Maryland’s status as a progressive energy leader.

“Maryland, with its moratorium on hydrofracking... is on everyone’s mind. And I think this decision will really show whether or not we’re serious about that,” said Josh Tulkin, director of the Sierra Club Maryland chapter.

Gov. Martin O’Malley issued a moratorium on hydraulic fracturing, or “fracking,” the controversial process of fracturing shale rocks to release natural gas, in 2011, pending a study of the practice. A commission’s findings are due in Annapolis in August.

Environmentalists fear the export business will provide incentive for fracking.

For the time being, the gas shipped to Cove Point for export is expected to come from other states.

...with a Local Impact

In Calvert County, Dominion executives say the more-than $3 billion project will supply the area with an estimated 75 full-time jobs, more than 3,000 construction jobs and an additional $40 million in annual tax revenue -- a prospect that has aroused enthusiasm.

“Right now we’re paying $700 billion a year to countries that hate us to bring in their fuels, and now we’re going to be making our own,” said Drew Greenblatt, president of Baltimore-based Marlin Steel Wire Products at a Feb. 19 Dominion press briefing.

The Calvert County commissioners unanimously support the project.

“Them switching into an export role will not only create a lot of employment locally (but will) help the tax base,” said Calvert County Commissioner Evan Slaughenhoupt. “Everyone’s going to benefit from the standpoint of having less burden going forward on their own taxes.”

Opponents say the county is focused on financial benefits.

“It’s an easy revenue answer for them,” said Dale Allison, who can see Dominion’s storage tanks from his kitchen window. “Ignorance is bliss when it comes to the safety aspects.”

At the heart of many residents’ concerns is potential harm from pollution, vapors or explosions.

The facility will have multiple safety systems and will have been reviewed by the Department of Transportation Pipeline and Hazardous Materials Safety Administration and FERC, said Mike Frederick, Dominion’s vice president of LNG operations.

The effects of an unlikely disaster, he said, would not spill into the community.

“We design it so that even in a catastrophic situation, the impact … remains on our property,” Frederick said.

Dominion has conducted drills with Calvert County emergency response teams, who would activate a siren and evacuate residents in an accident, he said.

Opponents have a slew of environmental concerns as well, including noise, pollution, ship traffic, ballast water and construction traffic.

One controversial element is a 60-foot noise barrier Dominion will build along the road and adjacent park to ensure that noise from the plant stays within regulations. The company says the area is surrounded by trees, so the wall won’t be visible from the outside.

To compensate for local air pollutants, the company will purchase offsets through the federally mandated cap-and-trade program.

“We’re operating within the laws, which are quite stringent about what you have to do,” Frederick said.

Pollutants from construction and operations include mono-nitrogen oxides, sulfur dioxide and volatile organic compounds (VOCs), according to a report from the Maryland Department of Natural Resources.

“What is that going to do to the air quality here for us locally?” said resident Kathy Mazur. “Their reply is, ‘We will meet federal standards.’ Okay, that’s great, and I’m glad you’re meeting them, but… what is the effect here?”

Waiting for Answers

The permitting process has moved to the center of the controversy.

FERC, rather than any state agency, will provide the most comprehensive oversight.

After the agency decided to do an environmental assessment rather than a more rigorous environmental impact statement, residents became nervous about the thoroughness of the oversight.

The two types of reports cover the same issues, said FERC spokeswoman Tamara Young-Allen. An environmental assessment is used for projects that have already been constructed, while impact statements are for brand-new projects, she said.

f FERC finds evidence of a significant environmental impact in the assessment, it will recommend an environmental impact statement, Young-Allen said.

FERC will release its environmental assessment May 15, the agency said. A final federal decision is due Aug. 13, after a public comment period.

In response to community concerns and at the request of Rep. Steny Hoyer, the Maryland Democrat who represents Calvert County, FERC will hold a public meeting to discuss the draft, something usually reserved for impact statements.

Some opponents blame FERC for what they say has been a lack of transparency and information about the affair.

“I think there should be more local input into these decision-making procedures,” said Sen. Ben Cardin, a Maryland Democrat. “I have reservations on how these regulatory decisions are made at FERC.”

FERC is not Dominion’s only obstacle. The company needs dozens of permits from federal, state and local agencies. Many have already been issued, but some have attracted public attention.

On Feb. 20, when the Maryland Public Service Commission began a hearing on a permit it must issue for the generation facility, protesters marched through downtown Baltimore, wrapping around several city blocks.

The Chesapeake Climate Action Network, the Sierra Club and Earthjustice, a nonprofit environmental law organization, have been some of the most active groups in protesting the project.

On February 28, the Maryland Court of Special Appeals affirmed a lower court ruling, saying that an existing agreement between the Sierra Club and Dominion allows for LNG export.

The environmental organization has shared stewardship of the Cove Point Natural Heritage Trust since 1972, when it formed a settlement with then-owner Columbia Gas to protect the land and set environmental restrictions for the facility, Tulkin said.

The Sierra Club said exporting is not allowed, as that wasn’t an option in 2005 when the agreement was last updated. Dominion and the Sierra Club filed motions against each other in May 2012.

The organization is reviewing the case to determine whether it will appeal the latest ruling, Tulkin said.

Two Camps, One Chasm

Some are anxious for the project to start.

“Calvert is a very rural community still, and to have the largest expansion happening in our backyard, with the types of jobs that we need from a proven business partner that’s been here the whole time in our community, we couldn’t have asked for a better opportunity,” said Carolyn Hart,president/CEO of the Calvert County Chamber of Commerce.

Hart, who lives near the facility, said she encourages citizens to do research and contact Dominion.

But others say they’ve done just that with little result.

“What we’ve been pushing for is that Dominion would just be more open with their answers and accurate with their information and have more of a public hearing where we can engage them more,” said Lusby resident Holly Herzog.

Like many, she has attended meetings where Dominion representatives were present but said she is concerned, based on her own research, that the company isn’t telling the whole truth.

Dominion representatives have appeared at public hearings, held two open houses at the plant and had more than 50 meetings with citizens. They also mailed a pamphlet to more than 20,000 households, Frederick said.

“We’ve met with anybody that’s asked,” Frederick said.

The project has found support in Hoyer and O’Malley, among others.

“I support the Cove Point project, subject to appropriate environmental review, because I believe it will spur economic growth and bring well-paying jobs to Calvert County,” Hoyer said in a statement.

Cardin and Maryland Sen. Barbara Mikulski asked FERC to engage the public “to the fullest extent possible” through public meetings in a March 6 letter. The senators met with community groups to discuss the project in February.

“I share their concerns that the environmental impact be known, so we want to make sure that whatever’s done at Cove Point is consistent with the protection of our environment,” Cardin said.

At the local level, as in the broader LNG debate, the two sides consistently dispute each other’s facts, and the fundamental disconnect between the camps is large.

While some residents plan to continue fighting, others, like Ward, are becoming resigned to what they see as an inevitability.

“I have a feeling it’s going to go through even though we don’t want it to. But I still pray. And maybe we still stand a chance,” she said.

Frederick said it is in Dominion’s interest to protect its facility and ensure it operates correctly.

“From an environmental perspective and a safety standpoint-- I live here too. Our employees live here too,” Frederick said. “We want to do it right.”


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White House Cyber Czar Speaks at Naval Academy


By Patrick Farrell
Capital News Service

ANNAPOLIS - In a speech at the U. S. Naval Academy, Special Assistant to the President and Cybersecurity Coordinator Michael Daniel said understanding “the human factor” of cyberwarfare is essential to making progress in the field of cyberdefense.

Hosted by the Academy’s Center for Cyber Security Studies in partnership with technology consulting firm Booz Allen Hamilton, Daniel discussed the threats the nation faces in cyberspace from the perspective of the White House, and why cybersecurity is becoming more difficult.

“We are working to protect… the global, transparent Internet,” said Daniel.

According to the Daniels, threats to the United States government in cyberspace fall into four categories: attacks on critical infrastructure, theft of intellectual property, traditional espionage, and threats to the open, global nature of the Internet.

“Bad guys don’t have to be coders sitting in their mother’s basement anymore,” Daniels said, noting that the tools available to those with malicious intent are becoming increasingly more sophisticated.

The speaker said that when you take a step back, it seems that cybersecurity should be a relatively easy task. 

Oftentimes hackers are utilizing methods the government knows to exist in order to attack vulnerabilities the government is also aware

of, Daniels said. He added that currently, “we clearly don’t understand the economics of cybersecurity.”

Daniel believes that economic and psychological factors, though underlooked, play a large part in shaping the landscape of cybersecurity attack.

“Until we really understand the human factor … we will never solve these problems,” he said.

Daniel went on to discuss what he called a “multi-stakeholder approach” to developing a framework for improving the country’s cybersecurity.

Normally the government interacts with the private sector in one of two ways: to regulate, or to contract, Daniel said.

In the case of the White House’s new cybersecurity initiative, which Daniel called a “uniquely American way” of handling things, the government is calling on the industry, academia and private companies to come together to aid one another.

Daniel said it is his hope that through this collaboration, those working in cybersecurity will be to produce a “cyberspace weathermap” - giving predictive value to data in order to aid in cyberdefense.  

In response to the increasingly sophisticated nature of cyberwarfare and the importance of cybersecurity, the Naval Academy offers a Cyber Operations major beginning with the Class of 2016.

Beginning with the Class of 2015, all midshipmen are required to take two cyber courses as a part of their core curriculum.


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Maryland Companies Have Billions in Assets Overseas


By Fola Akinnibi
Capital News Service

WASHINGTON - The president’s budget, released in early March, called for the creation of a national fund to finance repair of the nation’s crumbling roads, bridges and other infrastructure — an idea also proposed by a freshman Maryland congressman.

Rep. John Delaney, D-Potomac, wants to fund infrastructure repair by bringing home billions of dollars in foreign earnings from U.S.-based corporations.  The congressman said he has been long concerned about decaying infrastructure.

Delaney’s Partnership to Build America Act would create a new way to pay for these repairs. Corporations would provide the money by buying bonds in The American Infrastructure Fund.

In exchange, they would be allowed to bring back money locked up overseas without paying the full 35 percent corporate tax rate.

Delaney’s bill could come as a relief to corporations with large foreign operations that have deferred paying U.S. corporate taxes on their overseas earnings indefinitely. For example, 10 Maryland-based multinational corporations, including Columbia-based MICROS Systems Inc. and Baltimore-based Under Armour Inc., are holding a combined $3.5 billion overseas, according to filings with the Securities and Exchange Commission.

While it would mean a major tax savings, none of the 10 publicly held Maryland companies contacted would comment on the proposed legislation.

One expert said there’s little incentive to bring the funds back with so much business opportunity overseas. Instead, it makes sense for U.S. companies to let the overseas funds stay put and postpone a U.S. tax bill.

“It’s better to defer,” said Michael Faulkender, a finance professor at the University of Maryland’s Smith School of Business.

Further, the Delaney proposal is out of sync with many plans to overhaul the U.S. tax code, he said. “Every proposal on the table is for the corporate tax rate to go down, not up.”

Rich Badmington, W.R. Grace & Co.’s vice president of global communications, said most of the Columbia chemical company’s revenue comes from international operations. The company plans to continue investing in those operations.

“We are able to do that without bringing cash back to the U.S. because we are continuing to invest,” Badmington said. “(Research and development) is a function that requires continuing investment and we have quite a lot of that outside the U.S.”

President Barack Obama’s latest budget plan called for the creation of a government-owned entity to finance infrastructure projects. Delaney said the president’s support for something similar to his bill was “great,” and said it shows how much momentum the bill has.

“We’re very optimistic about it, we have strong bipartisan support,” Delaney said.

The bill has 57 co-sponsors in the House and 12 in the Senate, including Sens. Lindsey Graham, R-S.C., and Michael Bennet, D-Colo., head of the Senate Finance Committee’s Taxation and IRS Oversight subcommittee. Hearings have not been scheduled for the bill.

Under the tax code, corporations can avoid paying taxes on foreign earnings as long as the money is being permanently reinvested overseas. When the corporations decide to bring these funds back home, a process called “repatriation,” the money then is subject to U.S. taxes.

Originally, the tax exemption was meant to help U.S. corporations compete overseas, said Mitchell Kane, a tax professor at New York University’s School of Law. Companies claimed paying taxes in two countries would put them at a disadvantage and the government responded with the exemption, he said.

The plan was to have the companies pay foreign taxes, which in many cases are lower than the U.S. tax rate, and then pay U.S. taxes when the money was repatriated. After this process, the company would receive a credit for any foreign taxes paid, Kane said.

Allowing such an exemption has created an incentive for companies to keep their money overseas and defer the U.S. corporate tax, said Jane Gravelle, an economist with the Congressional Research Service. But parking money offshore isn’t a long-term solution for companies, she added.

“They may think they can hold their breath forever and borrow money,” Gravelle said. “How long are they going to be able to do that? Shareholders eventually want dividends.”

This exemption could result in $265.7 billion in lost revenue for the federal government through 2017, according to a 2013 report by Congress’ Joint Committee on Taxation.

For now, however, companies aren’t likely to repatriate without a major tax discount.

W.R. Grace has more than $1.1 billion held overseas and would have to pay $149.7 million in taxes if it was repatriated, according to SEC filings. That money will remain overseas, except in instances where repatriation would result in minimal or no U.S. taxes, the company said in its most recent SEC filing.

MICROS Systems, a Maryland-based computer hardware and software producer, has about 61 percent of its cash and cash equivalents, $385.8 million, held internationally with no plans to repatriate, according to the company’s most recent filings with the SEC.

Maryland-based apparel company Under Armour has $95.2 million, or 27 percent, of its cash and cash equivalents held overseas with no plans to bring it back.

Spokespersons from MICROS and Under Armour could not be reached for comment.

Other companies have begun to repatriate their foreign funds, which Kane said could help cover corporate expenses. McCormick & Company, a spice, herbs and flavoring manufacturer, repatriated $70 million in 2012, according to the company’s most recent SEC filings. Even still, most of the company’s cash is held in foreign subsidiaries, the filings said.

A spokesperson for McCormick and Co. could not be reached for comment.

Some of the largest U.S. corporations make about half of their money internationally, Delaney said. The bill is just a way to get some of it back.

“It creates a way for some of that money to come back, which is good for our economy,” Delaney said. “And it creates this large-scale infrastructure fund, which is good for our country.”

Instead of government funding, the American Infrastructure Fund would raise cash through a $50 billion bond offering. Companies would buy the bonds at a 1 percent fixed interest rate and a 50-year term, in exchange for a chance to repatriate a certain portion of overseas earnings tax-free for every dollar spent on bonds.

A bond to repatriation ratio would be determined by an auction and could result in companies paying an effective 12 percent tax rate, Delaney said. Money raised in the bond sale could then be leveraged and loaned to state and local governments for projects.

The auction process will benefit both the infrastructure fund and the corporations, which will be able to find a price that is right for them, Delaney said.

“We’ve talked to them and they’re very supportive of it,” he said.

The American Business Conference, Associated Equipment Distributors and Terex Corporation are among those supporting the bill.

Tech giants and pharmaceutical corporations have lobbied for a repatriation holiday since the 2004 American Jobs Creation Act allowed them to repatriate at a discounted rate. Because of the intellectually-based capital that these companies thrive on, it is sometimes easier for them to keep assets overseas.

For example, Apple has $124.4 billion held overseas, according to the company’s most recent SEC filing.

The 2004 bill reduced repatriation taxes to 5.25 percent if corporations promised to invest the money at home. The one-year holiday is widely regarded as a failure because it spurred an increase in repatriation, but not an increase in jobs or investments, according to a report by the Congressional Research Service.

“The argument was that it would be a stimulus” to the U.S. economy, Gravelle said. “Most people who studied this found out it was being used to repurchase shares.”

Share repurchases are a common way to boost stock prices.

Corporations used the money to pay stockholders dividends and pay off debts, which doesn’t make for a good stimulus, she continued.  Instead, the holiday created a “moral hazard” and companies have parked money overseas, waiting for the next holiday, Gravelle said.

Delaney’s bill has short-term benefits but doesn’t address the larger problems with the tax code, Faulkender said. Corporations will want to move more and more operations overseas if they can find discounts on U.S. taxes, he added.

“If you signal that firms are going to realize a lower tax rate, even after repatriation, on their foreign operations than on their domestic operations, you’re going to incentivize even more offshoring,” he said. "I don't think that's good for the U.S. economy."


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