|
Small Business Committee Newsletter Printer Friendly Version
Small Business Committee Notes
Monday, May 08, 2006 Printer Friendly Version
Small Business Committee Notes May 5, 2006 -- Issue 109-42 Phil Eskeland, Policy Director, House Committee on Small Business _______________________________ Chairman Manzullo: Small Businesses Need Relief from Costly Sarbanes-Oxley Provisions On Wednesday, May 3, House Small Business Committee Chairman Don Manzullo (R-IL) said small businesses should be exempt from certain Sarbanes-Oxley corporate governance provisions that are costing public companies – large and small – millions of dollars annually. Chairman Manzullo, who chaired a full committee hearing on the issue, urged the U.S. Securities and Exchange Commission (SEC) to heed a recent report from its Advisory Committee to Smaller Public Companies and provide waivers to smaller public companies that can’t afford the huge auditing and accounting costs of complying with Section 404 of the Sarbanes-Oxley Act. Shortly after Sarbanes-Oxley was enacted in 2002, the SEC estimated compliance costs for Section 404 at about $90,000 annually. In reality, costs have surged to more than $1 million annually on average. Smaller public companies with market values under $75 million have until July of 2007 to comply with Section 404, under current SEC rules. The Advisory Committee report, released just last week, recommends relief for smaller public companies. Specifically, the report states certain public companies with market values under $128 million should be exempt from Section 404 until appropriate auditing standards are established for these companies. “I strongly support the Advisory Committee’s recommendation to exempt smaller public companies from the extreme compliance costs of the Sarbanes-Oxley Act, and I hope the SEC will proceed accordingly,” Chairman Manzullo said. “Our small businesses should be focusing on growing and creating jobs for Americans, not paying outrageous regulatory costs.” For further information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ Chairman Manzullo Urges House Leaders to Oppose Tax Increase on U.S. Manufacturers On Tuesday, May 2, House Small Business Committee Chairman Don Manzullo (R-IL) called news reports of a proposed tax increase on U.S. manufacturers “shocking,” and he urged House leaders to come out strongly in favor of maintaining the tax deduction for domestic manufacturing enacted two years ago. Chairman Manzullo, who helped lead the Congressional effort to pass the phased-in 9 percent tax deduction for U.S. manufacturing as part of the corporate tax bill two years ago, said he was troubled by news reports that the House-Senate conference on the $70 billion tax reconciliation bill was considering scaling back the tax deduction for domestic manufacturing. Manufacturers are currently allowed a 3 percent tax deduction on qualifying goods and services produced in the United States. The deduction is scheduled to increase to 6 percent in 2007 and 9 percent in 2010. Chairman Manzullo, who also chairs the House Manufacturing Caucus, has been working to restore manufacturing in America by making the United States a more competitive place to do business and by trying to level the global playing field for U.S. manufacturers. Chairman Manzullo is especially concerned that the United States is losing its Defense Industrial Base and our country could soon be depending on other nations to make the weapons necessary to defend America. “It amazes me that at a time when we are losing precious industries necessary to defend us, some are thinking about raising taxes even higher on American manufacturers,” Chairman Manzullo said. “I urge our leaders to strongly protect this tax deduction that provides one of the few incentives to keep manufacturers in America.” For further information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ REA&T Subcommittee Hearing on the Universal Service Fund On Wednesday, May 3, Representative Sam Graves (R-MO) chaired a Rural Enterprises, Agriculture & Technology (REA&T) Subcommittee hearing on the future of rural telecommunications in relation to the universal service fund. Below is a copy of the opening statement of Chairman Graves. “Today, we will examine the sustainability of the Universal Service Fund (USF) and whether reform of this program is needed. The bedrock of rural telecommunications was a commitment by the federal government to provide universal service to all parts of America, including areas that are scarcely populated and expensive to service. The ultimate goal of the universal service policy is to ensure that every citizen, regardless of location, has affordable high-quality access to the public telecommunications network. The government planned to accomplish this by enacting a cost-recovery mechanism for providers that invested in network expansion in rural communities. In 1996, when our nation’s telecommunications laws were overhauled, the USF was expanded to provide a cost-recovery service to low-income families, rural hospitals, schools, and libraries. Providing service comparable to urban centers was a major objective of the program. For rural telecommunications companies, USF support is a critical means of cost recovery, but more importantly, it has afforded rural America the same technology and service as urban centers. Additionally, its contributions have helped ensure that schools and libraries have access to affordable telecommunications and information services allowing our children in rural communities’ access to resources important to their education. It further encourages folks to stay in rural communities helping spur economic growth in these areas. After a decade, Congress is again looking at re-writing the nation’s telecommunications law. I think it is very appropriate to look at reforming the Universal Service Fund. New services have been introduced including Broadband and Voice Over Internet Protocol. Broadening the base of contributors and encompassing new technologies is important to the long-term sustainability to the USF. The Congressional district I am proud to represent is largely rural, and the USF is extremely important to my constituents. I will work to ensure that all of our citizens have the same access to communications options. I applaud Representative Lee Terry (R-NE) for introducing his legislation, H.R. 5072, the Universal Service Reform Act of 2006, and feel this discussion is important to have considering recent developments on telecommunications matters. Hopefully, with continued conversations about the Universal Service Program, we can encourage others to take a closer look into this matter and help make the necessary reforms to continue its contributions to rural communities.” For further information, please contact Piper Largent, Professional Staff. _______________________________ Issues in Brief On Tuesday May 2, House Small Business Committee Chairman Donald Manzullo (R-IL) joined with the other co-chairs of the Congressional Friends of Canada Caucus (Representatives Henry Brown (R-SC), James Oberstar (D-MN), and Michael Michaud (D-ME)) in writing a letter to the President asking for a one-year delay in the implementation of the Western Hemisphere Travel Initiative (WHTI), which will require a “passport or other accepted documents” to cross the land border between the United States, Canada, and Mexico by January 1, 2008. The signatories to the letter believe that the negative economic impact of the WHTI implementation has still not been properly evaluated. Also, the signatories expressed concern that the technology needed to implement the goals of the WHTI successfully has not been adequately tested. The affect of the WHTI on small business was the subject of a Small Business Committee hearing held last November (see SBC Notes 109-29). On Thursday May 4, the Senate passed by a vote 78 to 20 the emergency supplemental appropriations bill (H.R. 4939) after adding even more funding for other items. Total cost of H.R. 4939 is now $108.9 billion. The President has pledged to veto this spending bill unless the cost is brought down to $94.5 billion, more along the lines of what passed the House last March. H.R. 4939 would provide $190 million in administrative funds to pay for the salary and expenses of SBA disaster loan processing personnel and $352 million in additional disaster loan budget authority for the SBA. This will provide approximately $2.4 billion in more lending for disaster loan victims. However, the SBA is expected to run out of disaster loan making authority by the end of the third week in May. Hopefully, the impasse between the House and Senate versions of H.R. 4939 can be resolved by then. _______________________________ Staff Changes As some of you may know, last Friday was Bradley Knox’s last day working for the Small Business Committee as its Chief Counsel. He is now working for an insurance company, which primarily offers medical policies, in its government relations department in Washington, DC. The Committee thanks Brad for his three years of service and wishes him all the best in his new endeavors. _______________________________ Upcoming Events Wednesday, May 10 2:00PM – full committee hearing on “Bridging the Equity Gap: Examining the Access to Capital for Entrepreneurs Act of 2006 (H.R. 5198).” For further information, please contact John Westmoreland, Chief Tax Counsel, or Adam Noah, Counsel. _________________________________ Past hearings/mark-ups/roundtables/meetings in 2006 February 1, 2006 – Tax, Finance & Exports (TF&E) and Rural Enterprises, Agriculture & Technology (REA&T) joint subcommittee hearing on “Transforming the Tax Code: An Examination of the President’s Tax Reform Panel Recommendations.” February 8, 2006 – Regulatory Reform & Oversight (RR&O) Subcommittee hearing on “The Internet Sales Tax: Headaches Ahead for Small Business?” March 2, 2006 – Workforce Empowerment & Government Programs (WE&GP) Subcommittee hearing on the “Oversight of the Small Business Administration’s Entrepreneurial Development Programs.” March 8, 2006 – TF&E Subcommittee hearing on the “Oversight of the Small Business Administration’s Finance Programs.” March 15, 2006 – REA&T Subcommittee hearing entitled, “The Missouri River and its Spring Rise: Science or Science Fiction?” March 15, 2006 – hearing on the Fiscal Year 2007 Budget and Reauthorization Proposals of the SBA. March 16, 2006 – RR&O Subcommittee hearing entitled, “The State of Small Business Security in a Cyber Economy.” March 30, 2006 – RR&O Subcommittee hearing on the “Procurement Assistance Programs of the SBA.” April 5, 2006 – hearing on “IRS Latest Enforcement: Is the Bulls-Eye on Small Businesses?” April 6, 2006 – RR&O Subcommittee hearing entitled “Can Small Healthcare Groups Feasibly Adopt Electronic Medical Records Technology?” April 26, 2006 – hearing on “Cutting Our Trade Deficit: Can the U.S. Muster Its Diverse Trade Promotion Operations to Make an Impact?” April 27, 2006 – WE&GP Subcommittee hearing on “Healthcare and Small Business: Proposals that will Help Lower Costs and Cover the Uninsured.” May 3, 2006 – REA&T Subcommittee hearing on “The Future of Rural Telecommunications: Is Universal Service Reform Needed?” May 3, 2006 – hearing on “What is the Proper Balance Between Investor Protection and Capital Formation for Smaller Public Companies?” _____________________________ Small Business Website Check out the Small Business Committee website at http://www.house.gov/smbiz. The site includes regular updates on small business committee news. The site features special projects, press releases, hearings and scheduling information. _______________________________ Phil Eskeland Deputy Chief of Staff & Policy Director House Committee on Small Business Phil.Eskeland@mail.house.gov (202) 225-5821 To contact any staff member listed in the above newsletter, please use the general number for the House Small Business Committee – (202) 225-5821. Please E-mail me if you want to be removed from the mailing list or if you know of others who might be interested in receiving this publication. Mission Statement of the House Committee on Small Business "We promote the success of America’s small businesses by leveling the global economic playing field and reducing domestic burdens that impede their growth. In this spirit, we work to ensure that every branch of the U.S. government understands the critical role America’s small businesses play – both at home and abroad – including the jobs they create and the spirit of entrepreneurship they embody.”
|
