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Small Business Committee Newsletter Printer Friendly Version
Small Business Committee Notes
Friday, April 28, 2006 Printer Friendly Version
Small Business Committee Notes April 28, 2006 -- Issue 109-41 Phil Eskeland, Policy Director, House Committee on Small Business _______________________________ Chairman Manzullo Thanks Hector Barreto for His Service, Welcomes New SBA Administrator from Illinois On Tuesday, April 25, House Small Business Committee Chairman Don Manzullo (R-IL) issued the following statement after learning of the resignation of U.S. Small Business Administration (SBA) Administrator Hector V. Barreto and the President’s nomination of Steven Preston, a prominent business leader in Illinois, to take his place: “Hector Barreto has been a good friend and a tremendous leader for the Small Business Administration, becoming the second-longest serving Administrator in the SBA’s history. Under Hector’s leadership, the SBA streamlined many functions and learned to do more with less while facing unparalleled challenges to the SBA’s disaster loan program from the 9/11 terrorist attacks and Hurricanes Katrina, Rita and Wilma. He led the charge to save taxpayers nearly $100 million annually by eliminating the federal subsidy that was wreaking havoc on the SBA’s 7(a) guaranteed loan program. Hector is a great guy, and I wish him the greatest success in his new position as national chairman of the Latino Coalition. “I am equally impressed with the credentials of Steven Preston of Illinois to become the next SBA Administrator. After speaking with Mr. Preston, I am confident he will meet and exceed the many challenges he will encounter at the helm of the SBA. As the current Executive Vice President and former Chief Financial Officer at The Service Master Company in Chicago, Mr. Preston has accumulated a wealth of experience in executive leadership and financial management that will serve him well at the SBA. I look forward to working with Mr. Preston to continue our mission to help our small businesses prosper and create jobs for Americans.” _______________________________ Reps. Manzullo, Mica, Kelly Introduce Legislation to Enhance Trade Opportunities for America’s Small Businesses On Wednesday, April 26, House Small Business Committee Chairman Don Manzullo (R-IL) and Reps. John Mica (R-FL) and Sue Kelly (R-NY) introduced legislation to reform the various U.S. trade promotion programs so they can more efficiently provide opportunities for America’s small and medium-sized businesses to sell their goods and services abroad. Representatives Manzullo, Mica, and Kelly discussed their bill Wednesday during a Small Business Committee hearing on the issue. The Small Business Trade Promotion Enhancement Act of 2006 (HR 5196) includes the following reforms: n Restructures the cumbersome Trade Promotion Coordinating Committee, currently within the International Trade Administration and comprising some 21 Federal departments and agencies, into a centrally focused Office of Trade Promotion within the Executive Office of the President. The 21 federal trade promotion organizations would function as an advisory board. n Enables the Office of Trade Promotion to advise the President on the adequacy of the annual trade promotion budget allocations of the Advisory Board Members. n Requires the Office to take an active role in overseeing the U.S. trade promotion programs to ensure the annual U.S. Export Strategy is implemented in a timely and effective manner. n Better synchronizes the trade promotion budget and annual U.S. Export Strategy report with the normal federal budget submission to Congress. n Enhances cross organizational information exchanges on “best practices” in trade promotion programs to provide better products for the U.S. business community. n Enhances international trade functions of the Small Business Administration to enable more effective discharge of legislated responsibilities. n Ensures the objectives of the Export Enhancement Act of 1988 and the Government Performance and Results Act of 1993 are achieved with minimal resources expended. “While 97 percent of U.S. exporters are small- and medium-sized enterprises, they account for just over one-fourth of U.S. exports,” Chairman Manzullo said. “This legislation will help the 30 percent of small manufacturers who do not currently export but would consider exporting if they had more help in securing vital information on foreign markets, customers, and export procedures.” Representative Kelly, who also serves on the Small Business Committee, said, “Trade expansion is vital for the livelihood of our small businesses. Unfortunately, over 7 years, there was only a 7 percent increase in the number of U.S. companies exporting. Congress must take steps to ensure the federal government does a better job of empowering American small businesses with information about what government resources are available to them.” Finally, Representative Mica added, “With record trade deficits, we must develop a coordinated and effective export strategy if we want to better compete in today’s international marketplace. Focused trading blocs are eating our economic lunch, and without substantial reform American businesses will fall further behind in emerging global markets.” For further information, please contact James Meenan, Senior Trade Advisor. _______________________________ Representatives Manzullo and Pomeroy Introduce Legislation to Provide Tax Credit for Investments in U.S. Small Businesses On Wednesday, April 26, U.S. House Small Business Committee Chairman Don Manzullo (R-IL) and Ways and Means Committee member Representative Earl Pomeroy (D-ND) introduced job-creating legislation that would provide a tax credit for those who invest in qualified American small businesses. The Access to Capital for Entrepreneurs (ACE) Act of 2006 (H.R. 5198) would create a 25-percent tax credit for accredited investors and certain partnerships (including angel investment pools if all are accredited investors) that invest cash or cash equivalents at an arm’s length in a qualified small business (as defined by the Small Business Act). An angel investment pool is a group of investors who come together to pursue common investments. To qualify for the tax credit, an investor would have to hold onto the investment for at least three years. The maximum amount eligible for the credit is $250,000 per investment and a total of $500,000 per qualified individual investor. “This legislation will provide an opportunity for entrepreneurship, inventiveness, and the creation and growth of American small businesses, the job creators of our economy,” Chairman Manzullo said. “It will establish private sector incentives that will provide much-needed seed capital for a small business to grow and prosper beyond the start-up stage. By creating additional incentives, we expect more angels to invest more dollars and create more jobs.” Representative Pomeroy added, “North Dakota was built on the pioneer spirit, the same spirit driving small businesses. This bill will provide needed support to get new businesses to the next stage of growth.” According to the Center for Venture Research, 227,000 angels invested more than $23 billion into new ventures last year, creating 198,000 new jobs, or 4 new jobs per angel investment. Twenty states currently offer some sort of income tax credit to encourage such private investments in early stage businesses, but this would be the first such credit at the federal level. For further information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ WE&GP Subcommittee Hearing on Small Business Health Care Issues On Thursday, April 27, Representative Marilyn Musgrave (R-CO) chaired a Workforce, Empowerment & Government Programs (WE&GP) Subcommittee hearing on small business health care proposals that are aimed at lowering costs and the number of uninsured. Below is an excerpt of Chairman Musgrave’s opening statement. For the full statement, please refer to the committee’s web site (www.house.gov/smbiz) under the hearing icon. “All Americans deserve reliable, high quality, and reasonably priced health care that will be there when 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...” …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 further information, please contact Joe Hartz, Professional Staff. _______________________________ Chairman Manzullo: CFIUS Reform Must Preserve Foreign Direct Investment in America On Thursday, April 27, U.S. House Small Business Committee Chairman Donald Manzullo (R-IL) said Congress must continue to encourage foreign investment in America as it considers reforms to the Administration committee that reviews foreign purchases of companies operating in the United States. Chairman Manzullo, who has challenged many decisions of the Committee on Foreign Investment in the United States (CFIUS) including the recent Dubai Ports World case, discussed the importance of foreign investment in America during a hearing today of the Financial Services Subcommittee on Domestic and International Monetary Policy, Trade and Technology. Chairman Manzullo, who also serves on this subcommittee, has been working closely with subcommittee Chair Deborah Pryce (R-OH) and House Majority Whip Roy Blunt (R-MO) on CFIUS reform legislation. During the hearing, Chairman Manzullo referred to a Wall Street Journal article published last Friday that reported foreign-supported jobs in the United States have dropped 10 percent since 2001. “U.S. subsidiaries of foreign companies employ 5.3 million Americans, pay out $318 billion in U.S. salaries, and account for 21 percent of all U.S. exported goods,” Chairman Manzullo said. “After the Dubai ports fiasco, we all recognize CFIUS is badly in need of reform and must become more transparent. But as we proceed, we should be very careful to avoid harming an already fragile investment climate in our country.” Thursday’s hearing was the second hearing Chair Pryce has called to discuss possible reforms since CFIUS’ rapid and cursory approval of the deal that initially gave Dubai Ports World -- a state-owned enterprise of the United Arab Emirates -- management control over 27 terminals at six major U.S. ports. Chairman Manzullo has been pushing two primary reforms to CFIUS: a) greater transparency and communication with Congress on applications of interest and b) extended reviews when deals involve companies owned by foreign governments. For further information, please contact Rich Beutel, Special Counsel. _______________________________ Issues in Brief On Wednesday, April 26, the outgoing Appeals Chief, David Robison, of the Internal Revenue Service (IRS) announced that the IRS will soon extend its fast-track appeals settlement program to small business taxpayers for the first time. A pilot program is expected to be unveiled within the next 60 days for taxpayers in the Small Business/Self-Employed Operating division. The pilot is expected to function in the same way as the current expedited appeals process does in the Large and Mid-Size Business Division. The initiative will be launched in as many as four major cities in the United States. _______________________________ Upcoming Events Wednesday, May 3 10:00AM – Rural Enterprises, Agriculture & Technology (REA&T) Subcommittee hearing on “The Future of Rural Telecommunications: Is Universal Service Reform Needed?” For further information, please contact Piper Largent, Professional Staff. Wednesday, May 3 2:00PM – full committee hearing on “What is the Proper Balance Between Investor Protection and Capital Formation for Smaller Public Companies?” For further information, please contact John Westmoreland, Chief Tax Counsel. _________________________________ Past hearings/mark-ups/roundtables/meetings in 2006 February 1, 2006 – Tax, Finance & Exports (TF&E) and (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.” _____________________________ 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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