CHRIS MYERS, FEDERAL GOVERNMENT AFFAIRS DIRECTOR
Corporate Tax Background:
The United States has the highest corporate tax rate in the world (nearly 40% with federal and state taxes), and is the only
major world economy that has not modernized its international tax rules in recent years. In fact, Congress completed the
last major tax reform effort in 1986 and wrote our international tax rules over 50 years ago. Our current system is outdated
and out of step with the rest of the world, putting U.S. based companies at a competitive disadvantage. To allow the
economy to grow, our country needs a comprehensive tax reform plan that lowers tax rates on businesses, updates our
international rules and does all of this in a fiscally responsible way.
We have committed tax reform advocates in Congress who will work with the President to achieve that long held goal. In
particular, we need comprehensive pro-growth business tax reform that lowers tax rates to incentivize investments by
businesses operating in the United States. We also need to update our international tax rules to give U.S. companies a
level playing field as we compete against foreign-based firms in markets at home and abroad. Comprehensive business
tax reform must include businesses of all sizes and forms in the U.S. Our economy relies on smaller S corporations and
other pass-through companies that include, for example, our domestic dealers and suppliers.
Caterpillar has been providing input to policymakers on how changes to the tax laws can impact business decisions. We
do need tax reform, but we also need Washington to get it done right and that’s why we’re staying engaged on the issue.
Talking Points:

Caterpillar advocates for tax policy that modernizes our international tax laws and provides a level playing field that
would allow the U.S. to compete in global markets against foreign-based companies.

Cutting the corporate tax rate must be a priority, as it would make the United States a more attractive place to invest
by both U.S. and foreign firms.

We need certainty with our tax laws. When important tax provisions expire every two years, it’s very difficult to make
long term business plans.

We’re not asking for a free lunch, but recognize that tax reform must be done in a fiscally responsible way. That’s why
Caterpillar is willing to put our current tax breaks on the negotiating table to help offset the cut to the corporate tax rate
and other needed reforms.

Tax reform must be comprehensive and include businesses of all types, from large corporations like Caterpillar to
smaller businesses that include our dealers, suppliers and customers.

If Washington wants to help expand manufacturing in the United States, foster private sector job creation and spur
economic development, then meaningful reform of our outdated tax system is a good place to start.

It is time to be serious about tax reform. We welcome opportunities to work with Congress and the Administration to
ensure that Caterpillar remains competitive in markets at home and abroad.
For more information, visit the Caterpillar Tax Policy Key Issues page on Gov.Cat.Com.
1
CHRIS MYERS, FEDERAL GOVERNMENT AFFAIRS DIRECTOR
U.S. Export-Import (Ex-Im) Bank Reauthorization
Background:
As the official export credit agency of the U.S., Ex-Im Bank assists in financing U.S. exports from thousands of American
companies. Ex-Im Bank is unique in leveling the playing field when U.S. exporters face foreign competitors with
government backing, when companies enter emerging markets, or against financing from other export credit agencies,
which have grown larger, more proactive, and more aggressive since the financial crisis.
Over the past five years, Ex-Im Bank has supported 1.2 million U.S. jobs. In fiscal year 2014, Ex-Im Bank approved $20.5
billion in total authorizations. These authorizations supported an estimated $27.5 billion in U.S. export sales, as well as
approximately 164,000 American jobs in communities across the country.
The charter for Ex-Im Bank expires on June 30, 2015. In September 2014, Congress approved a nine month extension of
the bank’s charter, but our focus this year is to secure a long-term reauthorization of the U.S. Export Import Bank to
provide the certainty needed for increased export sales, global competitiveness, and ultimately job creation.
Talking points:

Caterpillar’s 2014 sales and revenues were $55.184 billion—over half came from international markets.

Following the U.S. financial crisis in 2008 and Europe’s ongoing financial problems, Caterpillar customers are
demanding more Ex-Im Bank financing. This is a new normal.

Caterpillar strongly supports the reauthorization of Ex-Im Bank. Failure to reauthorize Ex-Im Bank will cede this
business to Caterpillar’s overseas competitors.

With Ex-Im Bank’s authorizing set to expire on June 30, 2015, Caterpillar needs the certainty that Ex-Im Bank will
continue to be a viable source of financing for our customers. Purchases of Caterpillar product are often contingent
upon Ex-Im Bank financing because they can get comparable financing from the Ex-Im Banks of other countries.

Many of Caterpillar’s small and medium sized overseas customers benefit from financing their Caterpillar equipment
in emerging markets. Ex-Im Bank offers loans and guarantees to foreign purchasers of U.S. manufactured goods who
meet strict lending qualifications when private-sector lenders can’t or won’t provide financing.

Caterpillar has about 6,400 U.S. suppliers and many of these suppliers benefit from Ex-Im Bank’s “Supply Chain
Finance” program to supplement their work capital needs.

The home countries of our foreign-based competitors have export finance banks, so Ex-Im Bank levels the playing
field for Caterpillar and other U.S. exporters.

Ex-Im Bank is the principal export finance arm of the U.S. government and is self-sustaining, returning a profit to the
U.S. Treasury.

Ex-Im Bank approved a loan to Roy Hill Iron Ore mine in Australia for $694 million in December 2013. Roy Hill is
buying U.S. products from 13 U.S. companies for mining equipment, rail locomotives and other products. Without ExIm Bank, Roy Hill’s would have purchased Japanese, South Korean and European products.

Caterpillar applauds Ex-Im Bank for approving the long-term financing request for the Roy Hill’s Australian iron-ore
project. By backing this project, Ex-Im Bank is bolstering U.S. manufacturing competitiveness, supporting American
jobs and promoting exports.
For more information, visit the Export-Import Bank Key Issues page on Gov.Cat.Com.
2
BILL LANE, INTERNATIONAL GOVERNMENT AFFAIRS DIRECTOR
Trade
Background:
Caterpillar supports policies that enhance competition in the global marketplace and reduce – or better yet, eliminate –
trade and investment barriers. That’s because Caterpillar competes best in a free trade environment. Free trade requires
us to continually improve our global competitiveness and creates an environment that allows us to better respond to our
customers’ needs and to grow our business profitably. It offers us the opportunity to source globally and thus compete
effectively while providing maximum value to users.
We believe increased commercial engagement leads to economic gains that raise standards of living, improve the quality
of life and promote sustainable development. More importantly, trade liberalization promotes peace and understanding
and is an important contributor to solving the global problems of hunger, poverty and disease.
Monthly Update:
What to expect in 2015?
Trade liberalization remains one of our top priorities. This year offers the very real possibility to win a new grant of Trade
Promotion Authority (TPA) that will provide America's trade negotiating team, with the tools to complete a robust Trans
Pacific Partnership (TPP). Passing TPA as soon as possible is an ambitious, yet realistic, objective that will receive the full
support of Caterpillar and the business community.
With leadership from the business community, the potential now exists for bipartisan cooperation that could result in trade
agreements that would make trade freer and fairer. The list of pending negotiations includes:

Trans-Pacific Partnership - With the inclusion of big markets like Japan, Canada and Mexico, Caterpillar’s
competitiveness will increase from a comprehensive, high standard TPP. For example, the North American Free
Trade Agreement (NAFTA) eliminated tariffs on Caterpillar’s American produced products, but it was an early trade
agreement that had cumbersome rule-of-origin provisions. NAFTA also did not address the issue of market access for
remanufactured products. These deficiencies could be remedied as part of a TPP agreement. Plus an agreement
would embrace zero-tariffs on all Cat products.

Transatlantic Trade and Investment Partnership - Thirteen million American and European jobs rely on
transatlantic trade and investment. An ambitious Transatlantic Trade and Investment Partnership (TTIP) has the
potential to impact a large portion of global trade. In addition to the elimination of remaining tariffs, TTlP has the
potential to encourage standards and regulations cooperation between European and American regulators. If
successful, the benefits to manufactures like Caterpillar would be enormous.

Trade Facilitation - The World Trade Organization (WTO) scored a big victory for multilateral trade agreements with
the recent passage of Trade Facilitation. Trade Facilitation is an agreement affecting all 159 WTO member countries
that will simplify customs procedures and improve the speed and reliability of imports and exports. Trade Facilitation
will help ensure Caterpillar equipment gets where it needs to be faster and more efficiently.

But first Congress must provide Trade Promotion Authority (TPA). TPA is Cat's top 2015 trade priority! During
both Republican and Democratic Administrations TPA has historically been a contentious vote. Yet without TPA, U.S.
trade negotiators lack the tools needed to conclude the best agreements. In effect, TPA provides Congressional
guidance and authority to the Administration regarding trade negotiations. In exchange, Congress promises to vote on
the final agreement without amendment. Under TPA, Congress can approve or reject the final trade deals, but cannot
it cannot alter the terms negotiators have reached. In effect, TPA would provide a level of trust to our negotiating
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partners and remove the fear that a final agreement would be cheery picked by Congress. History has demonstrated
that before our trade negotiators can strike the best possible deals, we must first have Trade Promotion Authority.
Talking points:

Caterpillar knows the benefits of free trade. For the past five years, tens of thousands of jobs have been supported
through more than $82 billion of exports from our U.S. factories. These exports have supported thousands of U.S.
jobs.

While we have had considerable success using free trade agreements (FTAs) to open markets with countries like
Chile, Australia, Peru and Colombia, there's more to be done. Caterpillar exports still face significant trade barriers in
many parts of Asia and Latin America, so we must continue to be a strong advocate for more trade and legislation that
will help keep our nation competitive.

We need the continued benefit of access to foreign markets and overseas customers through trade, and need
Congress to approve TPA. By renewing this authority that expired in 2007, the President and Congress can work
effectively to craft, finalize and ensure the quick passage of trade agreements that support and create jobs here in the
U.S. and around the world.

If foreign markets are opened even further and if the international playing field is level, we can expect even more
opportunities for Caterpillar.
For more information, visit the Free Trade Key Issues page on Gov.Cat.Com.
4
JASON LYNN, FEDERAL GOVERNMENT AFFAIRS MANAGER
DWAYNE BOLTON, FEDERAL GOVERNMENT AFFAIRS MANAGER
Background:
The 2012 federal surface transportation law, Moving Ahead for Progress in the 21st Century (MAP-21), was supported by
Caterpillar, in part, because it institutes a number of major policy reforms that address past concerns about the focus and
effectiveness of the highway and transit programs. The result is a restructured and reformed program with a renewed
federal role that targets limited resources towards national priorities and maximizes the potential of those investments to
deliver transportation improvements. While both parties heralded the new reforms and the legislation was overwhelmingly
approved, it is a partial victory.

Unfortunately, MAP-21 did nothing to resolve the long-term revenue problem facing the federal highway and
transit programs – since the gas tax has not been raised since 1993, there is not enough money coming in to the
Highway Trust Fund (HTF) to pay for authorized transportation spending. To simply preserve needed surface
transportation investments, Congress must now find roughly $16 billion per year.

The HTF faced insolvency in August of last year. Congress acted in July by passing a bill that will keep the HTF
solvent through May of 2015, ensuring that states will continue to receive money for planned projects.

MAP-21 also needs to be reauthorized. Additionally, because there is not enough money flowing into the HTF to
support current expenditures, Congress must raise the gas tax or develop a new long-term stable user fee based
revenue source for the HTF either in conjunction with reauthorization of MAP-21, or through a larger tax and
budget bill.

Congress must act by May 2015 to ensure that HTF revenues match existing expenditures or money for projects
will not flow to the states. It is probable at this point that Congress will pass an extension, ensuring that money is
available, but not solving the underlying structural issue.
Ultimately, Congress must find a sustainable, predictable, growing source of revenue. They must explore collection
mechanisms that are not administratively burdensome or costly. Congress must continue to look for ways to address the
inefficiency and problems in federal transportation policy and programs so that every dollar that comes from the federal
government gets the most “bang for the buck”.
Caterpillar Chairman & CEO Doug Oberhelman helped launch The Alliance for American Competitiveness – a new
transportation coalition dedicated to promoting economic growth through strategic infrastructure investment. The coalition
will be used to accomplish three goals – to inform lawmakers about the local and regional economic benefits of
infrastructure investment; to advocate for a long-term stable revenue source for infrastructure investment; and, to define
the broad economic impact of infrastructure investment. The executive Board of the coalition includes the CEO’s of
Honeywell, BNSF, DOW, and UPS.
Monthly Update:
Funding for the Highway Trust Fund expires in May 2015 so we are focusing on a multi-year surface transportation
authorization that ensures the long term solvency of the Highway Trust fund, will increase productivity, grow the economy
and provide well-paying jobs.
Talking points:

The next step is for Congress to approve a long-term Highway Trust Fund revenue solution to complement MAP-21’s
policy reforms. This long overdue combination would maximize the ability of federal resources to build and maintain a
national surface transportation network that boosts economic competitiveness and job creation.
5

The Highway Trust Fund can no longer support current levels of investment. While some suggest devolving the
programs to the states or drastic spending cuts, Congress demonstrated during the MAP-21 debate the votes aren't
there for either devolution or cutting investment by 60 percent to what revenues could support in 2015. That means
either more general fund transfers or new revenues.

Continuing to supplement existing Highway Trust Fund revenues with general fund transfers will add $154 billion to
the deficit over the next 10 years—exactly the opposite result Republicans are trying to achieve with their focus on
getting the debt on a sustainable path.

We agree with House Transportation Chairman Shuster that this is an urgent problem and that all revenue options
should be on the table. We need to fix this issue and ensure we have a long-term stable revenue source for the
Highway Trust Fund.

A long-term Highway Trust Fund revenue fix would be ideal as part of a broader tax/entitlement reform package
because it would generate economic growth and contribute to deficit reduction.

Congress must return to passing long-term multi-year transportation bills so that states and contractors have the
certainty they need to plan for large projects and make strategic long-term investments.
For more information, visit the Surface Transportation and Infrastructure Key Issues page on Gov.Cat.Com.
6
KATIE HAYS, FEDERAL GOVERNMENT MANAGER
Background:
Immigration reform has been a top issue of discussion in Congress this year. While Caterpillar's interests are mostly on
the high skilled side, we are actively engaged in advocating for common sense reform to our immigration system. Last
summer, the Senate passed the Border Security, Economic Security and Modernization Act (S.744) and the House must
act next. The House has made it clear that it will not take up the Senate bill for a vote but would rather opt for a series of
smaller bills that will address the important aspects of immigration reform in a "piece meal" approach possibly this
summer, including Border security, E-Verify, Agriculture, and high skilled reform. We will continue to encourage the House
to move forward and make progress on this important issue to Caterpillar and our customers. We hope that the House will
take up some immigration reform before the end of this Congressional session.
Monthly Update:
In December, 2014, Congress passed funding for the government through FY 2015 except for the Dept. of Homeland
Security (funded through Feb. 28), largely in response to the President’s executive actions on immigration. The House is
already working on changes to funding DHS that will focus on border security, but may also include some priority
immigration issues for the business community.
Talking Points:

Caterpillar supports common sense, comprehensive reform.
o We believe a comprehensive solution to immigration is in our national interest. It is up to Congress to
determine whether the solution is comprehensive and if the solution moves as one bill or as several bills.
o High-skilled immigration issues have been a priority for Caterpillar for many years, and have become
increasingly critical as the economy has improved. Although more and more skilled jobs have been created in
the United States, they go unfilled.

Immigration reform is an economic and competitive issue
o We are an American company. We were founded here and we consider the United States our home.
However, the world is changing and our competition is global. We need access to the world’s best talent
working for us – regardless of where they are from.
o Our people are our greatest asset. We have gaps in our workforce today, especially in the STEM fields, and
we rely on immigration reform to fill these gaps.

Our immigration system is broken
o The last time our nation’s immigration laws were updated was in 1986. Think about how much our world has
changed since then—Mark Zuckerberg was two years old and a cell phone cost $1,300. Our technology has
changed dramatically (as it has on Caterpillar machines) and yet the laws haven’t changed.

Immigration reform protects American jobs
o Every foreigner who graduates from a U.S. university with an advanced degree in a STEM field and remains
in the United States to work creates on average 2.62 jobs for American workers.
o We would rather hire Americans for every job open in America, but we simply aren’t graduating enough STEM
grads to fill the jobs we have available. We pay foreign workers the same wages as we do U.S. workers – and
advertise jobs first to U.S. workers.
o Caterpillar currently performs more than 85 percent of our R&D here in the United States, yet U.S. sales are
only about 33 percent of our business. We want to keep those jobs here in the United States.
For more information, visit the Immigration Reform Key Issues page on Gov.Cat.Com.
7
JASON LYNN, FEDERAL GOVERNMENT AFFAIRS MANAGER
JOE ALLEN, FEDERAL GOVERNMENT AFFAIRS MANAGER
Climate Action Plan
Background:
In June 2013, President Obama gave a speech at Georgetown University laying out a Climate Action Plan (Plan) with
both domestic and international elements. The two key features of this very diverse initiative are:
1. His plans do not require the involvement or approval of Congress, and
2. Many components are not new but continue his Administration’s heavy emphasis on “clean energy” (including
natural gas).
The most immediately controversial portion of the President’s Plan was his direction to the Environmental Protection
Agency (EPA) to issue a new version of a proposal originally published in April 2012 creating GHG emission standards
for future power plants, and regulations on existing coal fired plants. Additionally, the President called for an end to U.S.
government support for public financing of new coal plants overseas, except for (a) the most efficient coal technology
available in the world’s poorest countries, in cases where no other economically feasible alternative exists, or (b) facilities
deploying carbon capture and sequestration.
Monthly Update:
As directed by the Obama Administration in its Climate Action Plan, the EPA released a draft rule to regulate greenhouse
gas emissions (GHG) from fossil fuel-fired power plants across the U.S. under 111(d) of the Clean Air Act. The rule would
require power plants to reduce carbon dioxide emissions by 30 percent by 2030 from levels seen in 2005, with interim
goals beginning in 2020.
The EPA has proposed state-specific, rate-based goals for GHG reductions from the power sector, as well guidelines for
states to follow in developing plants to achieve the state specific goals. Overall, this proposal is an effort to scale down the
source of 40 percent of the country's greenhouse gas emissions by regulating plants that are in operation today.
This proposal could have a significant impact on power generation throughout the country. Not only could it cause
electricity prices to rise significantly, but also impact how the utility sector operates, from the power plant, to the grid, to
the home or business. Implementation of this proposed rule will not occur for at least 18-24 months, if there are no
procedural or legal delays. It is entirely likely that this rule will be subject to litigation delays which would push actual
implementation of the rule out to a much later date.
Caterpillar provided public comments to the EPA on this proposal, expressing concern with the impact this regulation
could have on electricity prices and the coal and coal-based power generations sectors.
Talking points:

Caterpillar supports balanced and comprehensive energy policies that include the responsible development and
utilization of a variety of energy resources, both traditional as well as alternative energy sources, to effectively address
energy security, energy poverty and energy access issues faced by many countries around the world.

Caterpillar believes that responsible legislation is necessary to adequately protect the environment while at the same
time helping billions of people increase their quality of life globally. In the United States, specifically, the proposed rule
issued by the EPA may negatively impact access to safe, reliable, affordable and abundant sources of energy from
our nation’s energy mix. Access to dependable energy resources is critical for energy security, economic prosperity
and growing the fragile U.S. economy.
8

Caterpillar is committed to working with the Administration, Congress and industry allies to develop sustainable
energy policies that effectively address domestic and international energy security, energy poverty and energy access
demands while providing a level playing field in which Caterpillar and our energy customers can operate.
9
JASON LYNN, FEDERAL GOVERNMENT AFFAIRS MANAGER
JOE ALLEN, FEDERAL GOVERNMENT AFFAIRS MANAGER
Keystone XL Pipeline
Background:
Keystone XL (KXL) is a proposed underground pipeline that would carry product from Canada’s oil sands to Nebraska,
where it connects to existing pipelines that run to the Gulf of Mexico. The United States has not given the final approval to
pipeline builder TransCanada to construct the Keystone XL pipeline yet. Supporters say the pipeline will create jobs,
provide an economic boost to our nation, and lessen our dependence on foreign oil, while ensuring safe and
environmentally responsible transport through a state of the art pipeline. Opponents of the construction of the pipeline
state a variety of environmental concerns.
The proposed KXL pipeline would run 1,179 miles from Hardisty, Alberta, Canada, to Steele City, Nebraska. It is a part of
the larger Keystone Pipeline system, carrying oil from Canada to the Gulf of Mexico. TransCanada assembled the
Keystone pipeline system in four phases, getting a jump on construction in states where regulatory approval was granted.
The first three phases have been completed and are carrying oil from Canada today. KXL is the fourth and final stage.
KXL would generate additional tax revenue, economic activity, and jobs for the United States. U.S. manufacturers want
construction of KXL. It is estimated that the KXL will create about 42,000 jobs. As Doug Oberhelman said in January 2015
in the Chicago Tribune, “Putting 42,000 people to work is like employing every undergraduate and graduate student at the
University of Illinois at Urbana-Champaign. Even temporary jobs over the two years needed to build the pipeline is no
small matter as the U.S. faces historically low labor participation rates like we do now.” All in all, the pipeline would inject
$2 billion in total economic benefits, according to the U.S. State Department.
Caterpillar has an interest in the approval of this important energy and infrastructure project of KXL. U.S. manufacturers
want construction of KXL to finally begin. It can create benefits and thousands of jobs for U.S. based businesses, both
large and small. Caterpillar pipelayers, excavators and track-type tractors are used in the North American pipeline
business. Caterpillar, our dealers and our customers are positioned to provide solutions to the world’s energy and
environmental challenges. All U.S. manufacturers need access to affordable, reliable energy. The recent increase in North
American energy sources in a substantial cost savings to those manufacturing in the U.S.
Monthly Update:
The Senate approved legislation that would have authorized the construction of the Keystone XL pipeline by a vote of 6236 on January 29, 2015. The House approved the legislation by a vote of 270-152 on February 11, 2015. On February
24, 2015, President Obama vetoed the legislation. The veto doesn't mean the end for KXL discussion. On March 4th, the
pipeline’s bipartisan supporters in Congress came up short of the needed votes to override the veto. Now, they are
expected to look to attach it to a larger piece of legislation later in the year.
Talking points:

Caterpillar has been a long supporter of KXL due to significant economic and energy impacts to North America.

Through core business and innovative technologies, we are world’s leading technology supplier to diverse energy
market and meet growing energy needs.
10
KAI HIRABAYASHI, SENIOR GOVERNMENT AFFAIRS REP
Background:
Many key provisions of the Affordable Care Act (ACA), or Obamacare, went into effect in 2014, including Exchanges,
Subsidies, the Individual Mandate and other requirements. However, On July 2, 2013, the Treasury department
announced it would delay by one year the employer reporting requirements and the employer mandate penalties in
Obamacare. The next major implementation date is 2018, when the 40% excise tax on high value health plans goes into
effect.
Monthly Update:
Caterpillar continues to advocate for policies and legislation that will allow us to continue to provide affordable, quality
health benefits to our employees. We support legislation, which would both repeal the funding mechanism for the
transitional reinsurance program, a $63 per head tax, and would delay the collecting of funds for the transitional
reinsurance program for three years. Caterpillar had to submit its first and largest payment on transitional reinsurance in
January 2015. Caterpillar also supported the passage of H.R. 30 which would redefine “full-time employees” as those who
work 40 hours or more per week. Caterpillar also supports H.R. 879 which would repeal the 40% excise tax on high value
health plans.
Talking Points:

While Caterpillar was prepared to meet all of the requirements to comply with the ACA, we are grateful for the
additional year we have to comply with these significant, new requirements.

There remains a great deal of concern from the business community on other aspects of the ACA that we will
continue to seek repeal or delay. Those include the definition of "full time" employee to be changed from 40 hours
down to 30 hours, a transitional reinsurance fee that employers will pay for the first three years, the 40% excise tax on
high value health plans, and the effort by the Equal Employment Opportunity Commission to sue employers who use
standard health related wellness plans.

We will continue to work with Congress and the Administration to change some of these provisions.
11
KAI HIRABAYASHI, SENIOR GOVERNMENT AFFAIRS REP
Background:
Employers like Caterpillar are constantly facing new regulations and enforcement tactics from the various federal
departments that cover the workplace. From the Department of Labor to the National Labor Relations Board, Caterpillar is
engaging with its trade associations in order to push back on burdensome and sometimes flawed policy, from OSHA
proposed regulations, to ambush elections. In 2014, the White House and the Department of Labor have pushed many
controversial rules as part of their election year message such as raising the minimum wage for Federal contractors, rewriting overtime regulations and promulgating a “blacklisting” rule for Federal contractors. Many of those rules will be
Final before 2016.
Monthly Update:
National Labor Relations Board – Joint Employer: the NLRB is considering broadening the definition of “joint employer”
under the National Labor Relations Act (NLRA) through two separate decisions involving non-traditional workplace
arrangements such as franchise agreements or subcontracting. The NLRB’s decisions will make it easier for employees
and their unions to hold liable a company like Caterpillar for violations allegedly committed by separate, independent
entities such as dealers or subcontractors.
National Labor Relations Board – Ambush Elections: Regulations were originally released by the NLRB in December
2011 would remove pre-election appeals and cut election time in half (closer to 20 days). The U.S. District Court (DC)
invalidated the regulation in May 2012. However, in February 2014, the regulations were re-issued by the NLRB. As
proposed, the rule would strip employers of many due process rights during representation elections and could shorten
election time frames from the current median of 38 days to as few as 10 days, effectively denying employers the
opportunity to communicate with employees about the union and employees an opportunity to hear about possible
disadvantages to union representation. The NLRB has issued a Final Rule that will be effective on April 14, 2015. The
U.S. Chamber, NAM, and several other trade associations have filed a lawsuit in Federal court to stop the rule.
Department of Labor – Blacklisting: The President issued an Executive Order directly the Department of Labor (DOL) and
the FAR Council to promulgate a new rule that will require Federal contractors to disclose any labor law violation over the
past three years and empower contracting officers to use those violations in the decision to award a contract. If awarded
the contractor must provide an update of its violations, as well as those of its subcontractors every six months. The DOL
and the FAR Council will likely complete a rule in Spring 2015.
Talking Points:
 Loosening the definition of “joint employer” will increase the liability and litigation against companies like Caterpillar
who lawfully use separate and independent entities for its employment needs.

The Ambush regulation is attempting to solve a problem that doesn’t exist. The average time from petition to election
under the existing system is 31 days, with over 90% of elections occurring within 56 days. This could shorten the time
we have to educate our employees prior to a union vote, while giving more time to the unions who have been
campaigning for a long period of time.

There are already appropriate legal protections and remedies for employees of Federal contractors whose rights have
been violated, as well as enforcement mechanisms for contractors that willfully break the law. The Administration’s
proposal would place a huge administrative burden on both large and small Federal contractors and which could
result in fewer employers wanting to become Federal contractors.
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TOM WALTERS, STATE GOVERNMENT AFFAIRS DIRECTOR
ROB CARNEY, MIDWEST STATE GOVERNMENT AFFAIRS MANAGER
KATHY BARBER, SOUTHERN STATE GOVERNMENT AFFAIRS MANAGER
JIM HALLORAN, WESTERN STATE GOVERNMENT AFFAIRS MANAGER
JANN MOORE, SOUTHEAST STATE GOVERNMENT AFFAIRS MANAGER
CARL VOLZ, NORTHEASTERN STATE GOVERNMENT AFFAIRS MANAGER
Patent Trolls Background:
Patent “trolls” are a new industry in America that lease or buy obscure patents and then send threatening and misleading
demand letters to unsuspecting businesses and consumers alleging patent infringement. Through deceptive practices,
they intimidate people into sending them money to avoid a more costly legal battle. As the federal government considers
how to deal with this problem within a comprehensive patent reform effort, many state governments are moving quickly to
pass their own laws against “trolls.” Over half of the states have introduced legislation that aims at inhibiting nefarious law
firms from using deceptive tactics when attempting to enforce obscure or outdated patents against small businesses.
Unfortunately, in their rush to inhibit troll behavior, many of these proposals inadvertently hurt legitimate patent holders
like Caterpillar.
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Working with Legal Services, our federal lobbying team, and like-minded companies in the 21 Century Coalition for
Patent Reform, the Caterpillar state government affairs team has been engaged in a multi-state effort to protect legitimate
patent communications and prevent unintended legal hurdles that these bills would create when attempting to enforce our
patents.
Monthly Update:
Working with several state attorneys general, legislative leaders, trade associations and proponents of patent troll
legislation, Caterpillar has been able to successfully negotiate compromise amendments in multiple states.
In Indiana and Kansas, Caterpillar worked with sponsors and trade associations to successfully amend onerous language
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to allow legitimate patent licensing communications without fear of legal action. Caterpillar and other members of the 21
Century Coalition have been successful in introducing model patent troll language in Mississippi and Ohio. In Texas, the
sponsor recently introduced language that includes language which will exempt Caterpillar. In Connecticut, our lobbying
efforts continue to help postpone debate on the patent troll bill.
Talking points:

Caterpillar supports legislation to protect unsuspecting businesses and customers against bad-faith patent demand
letters.

Caterpillar also supports legislation that protects legitimate business to business patent licensing communications.
State Level Transportation Funding Background
In the current 2015 state legislative sessions, 17 states are contemplating how they are going to add significantly more
funding for transportation to replace and maintain crumbling roads and bridges and to manage growth. Many factors have
led to this crisis including the potential insolvency of the Highway Trust Fund due to declining vehicle miles traveled and
more fuel efficient vehicles. States have also seen a rapid decline in local gas tax revenue due to lower oil prices.
Attempts to raise new state revenue vary from state to state. Plans include increasing the fuel tax, indexing the excise fuel
tax rate to inflation, increasing the wholesale tax on fuel, adding a one-cent sales tax, tolls, public private partnerships,
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and increasing vehicle fees. Although the return on investment would be substantial, tax increases are never popular and
elected leaders are finding it difficult to gain support.
Monthly Update:
Caterpillar is encouraging state leaders to move forward on significant increases in state funding for transportation in this
legislative session.
Talking Points

To sustain growing economies, modernizing the infrastructure investments made years ago is absolutely essential.

It is critical to the success of companies like Caterpillar as we do business and compete in the global marketplace.

Our success and ability to remain globally competitive depends in large part on the speed and velocity with which we
can move goods.

As an end-user, the condition and efficiency of the transportation infrastructure in the states is exceptionally important
to our supply chain; whether we are importing or exporting goods to and from the ports, or to our facilities, dealers,
and customers in North America.
Dealer Agreement and Warranty Background:
Construction and agriculture dealers have long sought greater protections and enhanced warranty reimbursement rates in
their respective contracts with suppliers. Due to the cyclical nature of these industries and the efforts of some
manufacturers to consolidate dealerships, our competitors’ dealers (through dealer trade associations) have brought their
grievances to state legislatures throughout the country. In place of current private contracts, legislators attempt to
substitute arbitrary state-imposed policies and procedures. In many instances, legislative efforts fail to recognize the
unique and mutually acceptable policies developed over several decades between Caterpillar and its dealers. This type of
legislation poses obvious risks and threatens the effective administration of our independent distribution network. Working
with our dealers, trade associations and contract lobbyists, government affairs seeks to neutralize or mitigate the negative
effects of this type of legislation and to ensure the competitiveness of Caterpillar and its dealers across the country.
Monthly Update:
In Alaska, we are waiting on updated legislative language on a warranty bill that will impose requirements on
manufacturers for defective parts and shipping costs. Caterpillar is working with the bill sponsor to educate them on the
unique way in which we handle these issues and we are hopeful that we will achieve a mutually agreed upon solution.
In Montana, legislation was introduced that would have negatively impacted a suppliers rights regarding a dealer’s
transfer of ownership. Working with legislative staff and the Association of Equipment Manufacturers (AEM), government
affairs was successful in stopping the bill from advancing.
Legislation impacting dealer agreements and/or dealer warranty has also recently been introduced in Idaho, Oregon,
Pennsylvania and Vermont. We will continue to work closely with state trade associations, AEM and, where necessary,
hire contract lobbyists to protect the Caterpillar and Caterpillar dealer relationship.
Talking Points

Caterpillar sustains an outstanding relationship with our dealers through trust, communication and shared rewards.
We work continuously with our partners to provide products, services and support solutions necessary to satisfy
customer needs.

We oppose legislative action that interferes with the Caterpillar dealer agreements and warranty practices that have
been in place for decades and are successful and mutually satisfactory.
In other issues around the country:

Illinois State Budget
Governor Rauner unveiled his budget plan in February, outlining difficult decisions the state must make to truly
balance the budget. After years of overspending and using accounting gimmicks, Rauner presented the first honest
budget plan the state has seen in a decade.
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The Rauner budget balances the budget without reinstating the temporary income tax increase that expired on
January 1, 2015. It would eliminate $6.2 Billion in structural deficit and includes $500 Million to pay down unpaid bills.
Facing Democrat supermajorities in the House and Senate, the Rauner Adminstration now begins the tough work of
negotiating a budget that can pass.

Illinois 2015 Legislative Priorities
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WORKERS’ COMPENSATION REFORM
Caterpillar continues to lead the charge in Illinois for meaningful Workers’ Compensation reform. Thanks to
the efforts of Governor Rauner, work comp reform is back on the agenda in Springfield. Cat is working with a
coalition of business groups to tackle the root causes of this expensive regulation on Illinois employers.
Reform faces tough opposition from Democrat majorities in the state house who side with labor and trial
lawyers on this issue.
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KEY TAX CREDIT RENEWAL
The state’s Research & Development Income Tax Credit will expire in 2015. Caterpillar Government Affairs
staff is working with a coalition of interested parties in passing legislation that will renew the credit. The R&D
credit will likely be a point of negotiation in the final budget worked out by Republicans and Democrats.
The Manufacturers’ Purchase Sales Tax Credit (MPC) expired in 2014. Despite heavy lobbying by the
business community for its renewal, Democrat majorities failed to extend the credit used by businesses to
offset the cost of inputs to the manufacturing process. We continue to advocate for its renewal. Like the R&D
credit, MPC will be a negotiating point in the final state budget plan.
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REPEAL TAX ON CAPTIVE INSURANCE POLICIES
Late in the Pat Quinn Administration, the Department of Insurance passed through the General Assembly a
new tax on captive insurance policies held by Illinois based corporations. Lawmakers were unaware that the
new tax was hidden in the legislation, and upon learning of it called for a gubernatorial veto. Quinn signed the
bill into law, but efforts are underway to repeal the law. Caterpillar is impacted by this new tax, and seeks to
pass the repeal law.

Wyoming Tax Exemption
We were successful is securing the passage of a 6-year extension for our tax exemption for locomotive rolling stock.
This means that we will be exempt from state sales and use tax for our parts and service work on repairing locomotive
cars. The bill passed the House without an expiration date but the final version out of the Senate had a 6-year
expiration date. The House will take action on Senate bill in the coming days and we expect the Governor to sign the
bill when it reaches his desk.

Montana Dealer Legislation
We were successful in negotiating a compromise on potentially damaging dealer legislation that would have greatly
hampered the ability to transfer ownership of a dealership. Senate Bill 257 would have placed onerous requirements
on Caterpillar in the event a dealership was ever sold and the state dealer association has asked manufacturers to
work with them on a suitable alternative. Those negotiations will begin in the coming months.
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