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Small Business Committee Newsletter Printer Friendly Version
Small Business Committee Notes
Friday, September 08, 2006 Printer Friendly Version
Small Business Committee Notes September 8, 2006 -- Issue 109-53 Phil Eskeland, Policy Director, House Committee on Small Business _____________________________ WE&GP Subcommittee Field Hearing on Health Care and Small Business – Real Options for Colorado Businesses On Thursday, August 10, the Subcommittee on Workforce, Empowerment and Government Programs (WE&GP), chaired by Representative Marilyn Musgrave (R-CO), held a field hearing in Loveland, Colorado on small business health care issues. Below are excerpts from Chairman Musgrave’s opening statement. “Thank you all for being here as we examine health care choices for American small businesses, their employees, and working families. Before we begin, I would like to thank my good friend, Representative John Shadegg (R-AZ), for making the trip up from Arizona to be here with us today. I consider John to be a dear friend and respected colleague and it is a great honor to host him here in Loveland. All Americans deserve reliable, high quality, and reasonably priced health care that will be there then they need it. One of the most stressing statistics we see each year is the rising number of Americans who live without health insurance, currently estimated at roughly 45 million people. Of those without health insurance, about 60 percent are small business owners, employees of small businesses, and their families. As health care costs continue to rise, fewer employers and working families will be able to afford coverage. Clearly, we in Congress must look at this pressing problem and find solutions that will create an environment so those that need health insurance can not only find the coverage they need, but also afford it. We need to be working toward a health care delivery method that works best, not just what we’ve always done. A simple look at the current health care landscape shows that the system is not working. Our focus today will be on four proposals that this Congress has begun work on to help Americans get the coverage they need, at a price they can afford. These proposals are the establishment of Association Health Plans, or AHPs, increasing the availability, use, and ease of Health Savings Accounts or HSAs, reforming the medical liability system, and examining Congressman John Shadegg’s common-sense legislation, H.R. 2355, the Health Care Choice Act. On July 26, 2005, the House of Representatives passed H.R. 525, the Small Business Health Fairness Act of 2005, that would establish federally regulated association health plans, with a strong bipartisan vote. This was the seventh time the House has passed such legislation. AHPs would allow small businesses to band together across state lines, through their membership in an association, to purchase more affordable health insurance. Unions and large corporations already have this ability and it makes sense to me that small businesses should as well. Health Savings Accounts are a new way that people can pay for medical expenses not covered by insurance or other reimbursements. Eligible individuals can establish and fund these accounts when they have a qualifying high deductible health plan and no other health insurance, with some exceptions. The accounts have significant tax advantages: Contributions are deductible, Withdrawals used for medical expenses are not taxed, Account earnings are tax-exempt, and Unused balances may accumulate without limit. President Bush has proposed several improvements to HSAs, such as allowing Americans who purchase HSA-qualified insurance policies on their own to have the same tax advantages as people who obtain insurance through their employers and eliminating all taxes on out-of-pocket spending through HSAs. An additional area Congress and the President have worked on together is tort reform for the medical community. America’s patients are losing access to care because the nation’s out-of-control legal system is forcing physicians in some areas of the country to retire early, relocate or give up performing high-risk medical procedures. There are now 21 states in a full-blown medical liability crisis -- up from 12 in 2002. In crisis states, patients continue to lose access to care. In some states, obstetricians and rural family physicians no longer deliver babies. Meanwhile, high-risk specialists no longer provide trauma care or perform complicated surgical procedures. Excessive litigation and high medical malpractice rates have added to employers’ health care costs and spurred some providers to “err on the side of caution” that comes at the expense of both health plan dollars and patients receiving unnecessary service. This issue isn’t just about physicians -- its effects cut across the health care sector. Hospitals need physicians to admit patients. Companies that manufacture medical devices and pharmaceuticals need physicians to use and prescribe their products. Similar to the AHP legislation, the House passed H.R. 5, the Help Efficient, Accessible, Low-Cost, Timely Health Care or ‘HEALTH’ Act of 2005, on July 28, 2005. Yet another proposal to help Americans find and purchase affordable health insurance is legislation introduced by Representative Shadegg—H.R. 2355, the Health Care Choice Act of 2005. Under this legislation, consumers would no longer be limited to purchasing policies dictated by their state’s regulations and mandated benefits. Instead, they could decide among a variety of insurance policies qualified in one state but offered for sale in multiple states. As we all know, there is no one solution to a problem as complicated and complex as 45 million Americans without health insurance. Small business employers and employees are in critical need of new ways to increase health insurance coverage, and the proposals examined today are responsive solutions to this problem. For more information, please contact Joe Hartz, Professional Staff _______________________________ Estate Tax Reduction Fails another Senate Cloture Vote In a further effort to encourage the Senate to pass estate tax reform, the House passed a third bill (H.R. 5970) during the early morning hours of Saturday, July 29 by a vote of 230 to 180 that would reform the estate tax, gradually increase the minimum wage, and extend other important tax cuts such as the research tax credit. The estate tax reduction provisions in H.R. 5970 were similar to previous legislation that passed the House in late June but saw no action in the Senate (see SBC Notes 109-48). This includes an exemption (and indexes for inflation in the future) all estates worth less than $5 million from taxation and would tax estates between $5 million and $25 million at the capital gains rate. However, on Thursday, August 3, the Senate once again was not able to invoke cloture on this bill by a mere three votes even though a majority of Senators voted to continue debate on H.R. 5970 by a vote of 56 to 42. A super-majority of 60 votes are needed in the 100-Member Senate to invoke cloture to stop a filibuster. The Senate is comprised of 55 Republican and 45 Democrat Senators. All but four Democrat Senators voted against invoking cloture. For more information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ Update on Small Business Contracting Issues On Thursday, August 3, the Deputy Director for Management at the Office of Management and Budget (OMB), Clay Johnson III, said in a letter to Senate Small Business & Entrepreneurship Chair Olympia Snowe (R-ME) that OMB will take a series of concrete steps within the Office of Federal Procurement Policy (OFPP) to hold federal agencies more accountable for achieving their small business goals. These include: work with Congress to develop a scorecard to assess agencies’ progress in improving their achievement of small business goals and unbundling contracts; brief Congress at least quarterly on how well agencies are doing; consider adding the President’s initiative against contract bundling to the President’s management agenda; designate a senior position in OFPP that will have primary responsibility for small business issues, including contract bundling; clarify agency responsibilities to increase small business access to federal procurements by unbundling contracts and promoting competition; and explore ways to increase the number of Small Business Administration procurement center representatives to help reduce contract bundling. In addition, Deputy Director Johnson said he will ask OFPP to propose rule changes governing small business size status to guard against miscoding and fraud. He promised to report OMB’s progress in implementing these steps by November 15, 2006. For more information, please contact Nelson Crowther, General Counsel. _______________________________ Update on Sarbanes-Oxley On Wednesday, August 9, the Securities and Exchange Commission (SEC) proposed to extend the deadline for smaller public companies to comply with the internal control requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Under the proposal, a non-accelerated filer would not be required to file a management’s report on internal control over financial reporting until it files an annual report for a fiscal year ending on or after December 15, 2007. The initial date was July 15, 2007. In addition, the SEC is proposing to extend the deadline by which non-accelerated filers must begin to comply with the Section 404(b) requirement to include an auditor’s attestation report on internal controls in their annual reports. This deadline would be moved to the first annual report for a fiscal year ending on or after December 15, 2008. Comments are due on the SEC’s regulatory proposal by September 14, 2006. More details can be found on the web site of the SEC (www.sec.gov). The effect of Sarbanes-Oxley on small companies was the subject of a Small Business Committee hearing held in May (see SBC Notes 109-42). For more information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ IRS Extends “Fast-Track” Settlement Procedures to Small Businesses On Tuesday, August 22, the Internal Revenue Service (IRS) announced an extension of its fast track appeals settlement procedure to small businesses and self-employed taxpayers for the first time. In Announcement 2006-61, the agency said it wants to allow these taxpayers "to expedite case resolution at the earliest possible opportunity," using a modified version of the process that has been available to large and mid-size taxpayers since 2003. The process allows taxpayers to reach quick solutions of their issues with input from appeals officers at the audit level. The IRS hopes this may help identify issues that could be addressed through broader settlements, as it has in the Large and Mid-Size Business Division. If agents see a large number of cases where taxpayers are having similar issues, it gives the IRS an opportunity to put forth a broader-based solution. According to IRS, the fast track process will be available to taxpayers under audit in the Small Business/Self-Employed Division with unresolved issues in at least one open tax year. For further information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ Upcoming Events No official committee events planned at this time. Note, the Federal Prison Industries Competition in Contracting Act (H.R. 2965) is expected to be debated on the House floor on Wednesday, September 13th. _________________________________ Past hearings/mark-ups/roundtables/meetings in 2006 February 1, 2006 – Joint Tax, Finance & Exports (TF&E) and Rural Enterprises, Agriculture & Technology (REA&T) 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?” May 10, 2006 – hearing on “Bridging the Equity Gap: Examining the Access to Capital for Entrepreneurs Act of 2006.” May 23, 2006 – RR&O Subcommittee hearing on “Data Protection and the Consumer: Who Loses When Your Data Takes a Hike?” May 25, 2006 – REA&T Subcommittee hearing on “Unlocking Charitable Giving.” June 7, 2006 – hearing on “Contracting the Internet: Does ICANN Create a Barrier to Small Business? June 21, 2006 – Joint hearing with the Government Reform Committee on “Northern Lights and Procurement Plights: The Effect of the ANC Program on Federal Procurement and Alaska Native Corporations.” June 27, 2006 – RR&O Subcommittee hearing on “S Corporations: Their History and Challenges.” June 27, 2006 – WE&GP Subcommittee hearing on “Immigrant Employer Verification and Small Business.” June 28, 2006 – TF&E Subcommittee hearing on “The Effects of the High Cost of Natural Gas on Small Businesses and Future Energy Technologies.” July 13, 2006 – RR&O Subcommittee hearing on “An Update on Administration Action to Reduce Unnecessary Regulatory Burdens on America’s Small Manufacturers.” July 20, 2006 – Joint REA&T and TF&E Subcommittee hearing on “Does China Enact Barriers to Fair Trade?” July 25, 2006 – hearing on “Failure to Comply with the Regulatory Flexibility Act: IRS Endangering Small Businesses Yet Again.” August 10, 2006 – WE&GP Subcommittee field hearing in Loveland, CO on “Health Care and Small Business – Real Options for Colorado Businesses.” _____________________________ 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.”
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