Capitol Hill Roundup

The Small Business blog's monthly roundup of legislation, regulation and other government activity affecting small businesses. In February:

President Bush signed into law legislation designed to expand business opportunities for veterans and help reservists keep their businesses afloat during and after deployment. Sen. John Kerry (D-Mass.), who chairs the Senate panel overseeing small firms and entrepreneurs, is pressing for implementation of the law. Meanwhile, Kerry's committee announced that it is investigating the management of a non-profit group created by Congress in 1999 designed to maintain a network of information and assistance centers for use by veterans and the public. Some of the centers expect to close even though the non-profit was allocated enough money to fund them.

The president signed a bill in February, H.R. 5264, that extends the Andean Trade Preference Act through this year. Small Business Administration chief Steven Preston used the opportunity to encourage Congress to pass a free-trade deal with Colombia. Preston went to Colombia at the end of the month with lawmakers and other government officials.

Both the House and the Senate small business panels held hearings on the Bush administration's fiscal 2009 budget for the Small Business Administration. And both panels ripped into Preston for what the lawmakers said were failings by the president to efectively aid small firms. The Senate panel said the budget "doesn't address the economic challenges faced by small businesses and fails to invest in lending, contracting and counseling programs." It also trashed the budget upon its February release. Kerry sent a letter on Feb. 13 to Preston asking for the administration to outline steps it will take to help small businesses facing a contracting credit market. The House panel said America's credit crunch calls for a sound budget that invests in small firms, but "for the seventh year in a row, however, the Bush administration chose to ignore those facts." The SBA released a list of frequently asked questions about the FY09 budget

The House Small Business Committee held a hearing on the impact that business activity taxes are having on small businesses. Business activity taxes are levied by states on companies that, while not physically located in there, engage in some economic activity in the state. A related bill that was recently introduced by two Virginia lawmakers faces opposition from the National Governors' Association.

That same committee took a look at the effectiveness and impact of the Paperwork Reduction Act on small firms. "Dealing with sharp increases in paperwork is a challenge for any business, but it is especially difficult for small firms, which have fewer resources than their large counterparts and are regularly placed at a competitive disadvantage by questionable requirements," said Rep. Nydia Velázquez (D-N.Y.), who heads the panel. The panel said small firms spend 15 percent more time on paperwork than they did three years ago.

The House panel held its fifth hearing on health care reform and looked at initiatives on the state level. The committee heard testimony from Minnesota Gov. Tim Pawlenty and Pennsylvania Gov. Edward Rendell, both of whom are trying to restructure their states' health care systems while recognizing small firms. "The health care crisis affects millions of Americans--including more than 10 million children who live in households headed by self-employed workers or small business employees," said Velázquez.

A House subcommittee reviewed the Small Business Innovation and Research program and how it aids small firms. The Small Business Subcommittee on Investigations and Oversight heard from representatives of the National Institutes of Health and small business owners testified about the unique role small firms play in discovering new medical breakthroughs. Funding for the program is scheduled to expire this year.

The House Small Business Contracting and Technology Subcommittee heard testimony from Chairman Christopher Cox of the Securities and Exchange Commission and from a panel of small business experts on the importance of "plain language" in federal documents.

Sens. Mary Landrieu (D-La.) and David Vitter (R-La.), members of the Committee on Small Business and Entrepreneurship, held a field hearing, "Rebuilding the Gulf Coast: Small Business Recovery in South Louisiana." They examined the challenges still facing businesses affected by the 2005 hurricanes.

House Financial Institutions and Consumer Credit Subcommittee Chairwoman Carolyn Maloney (D-N.Y.) introduced a bill, H.R. 5244, designed to level the playing field between credit card firms and consumers. A handful of lawmakers who have introduced similar bills joined with consumer advocacy groups for a Valentine's Day "kiss credit card abuses goodbye" event on Capitol Hill. The groups delivered 120,000 valentine postcards with Hershey's Kisses to Capitol Hill offices throughout the day.

Rep. Ron Kind (D-Wis.) introduced a measure aiming to help small businesses offer savings plans to their employees. The Small Businesses Add Value for Employees Act, H.R. 5160, would change the existing SIMPLE IRA and SIMPLE 401(k) retirement plans to incentivize small business owners to offer savings plans to their employees by providing more flexibility and reducing administrative burdens.


The IRS said that as of Mar. 3, e-File is off to a fast start with more than 38 million tax returns filed electronically. The 2008 e-File level is up 5 percent from the 36 million returns filed for the same period last year, with double digit growth coming from taxpayers filing from their home computers.

The IRS also announced the launch of an electronic filing system that small tax-exempt organizations may use to comply with a new law requiring them to file an annual return. In the past, small tax-exempt organizations generally were not required to file Forms 990 or 990-EZ, the annual information returns for tax-exempt organizations. But the Pension Protection Act of 2006 requires that tax-exempt organizations that normally have annual gross receipts of $25,000 or less must file an electronic Form 990-N. The IRS also has launched a disclosure site on where the public can view a particular organization's e-Postcard.

Lobbying and Courts

The Small Business and Entrepreneurship Council sent a letter of support to Sen. Christopher Dodd (D-Conn.) and Rep. Christopher Shays (R-Conn.) for sponsoring a measure (S. 785 and H.R.1360) designed to eliminate tax unfairness toward telecommuters and small businesses.

The National Federation of Independent Business said you win some, you lose some. The group said the Supreme Court's decision in Federal Express v. Holowecki was disappointing because it does little to clear up the uncertainty over what paperwork must be filed by an employee with the Equal Employment Opportunity Commission to initiate an employment discrimination claim.

However, it praised the high court's opinion that it said will help small business owners defend themselves against employment discrimination lawsuits. In Sprint v. Mendelsohn, the court ruled that courts are not required or barred from admitting "me-too" evidence - testimony by non-parties who are not similarly situated to the plaintiff - in employment law discrimination cases. The group also praised the Ohio Supreme Court for delivering a victory for small business owners when it ruled that the state's statute of repose, a law that prohibits tort claims to be filed after a 10-year period, is constitutional.

By Sharon McLoone |  March 6, 2008; 11:39 AM ET
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