Washington Watch - June 23, 2010


Washington Watch - June 23, 2010

Micro-Businesses Support Energy-Saving Measures

Despite a challenging economic climate, saving on energy costs remains a priority for many small business owners. Fifty percent of micro-business owners have made efforts to reduce their energy costs by implementing energy-saving measures in their home and business, according to a study undertaken by the NASE. Forty percent of respondents indicated they had implemented energy-saving measures in their home only, while only nine percent of respondents indicated they had not undergone any energy-saving changes in their home or business.

Almost half (49 percent) of survey respondents indicated they were willing to undergo and pay for the implementation of energy-saving measures in their home and/or business. Of those that were unsure or unwilling to implement these measures, 46 percent indicated that this was due to cost. 

In light the current oil spill in the Gulf of Mexico, 59 percent of small business owners believe that policymakers should prioritize a national energy policy. The priorities of small business owners in regards to the components of a national energy policy were closely divided between reducing dependence on oil (25 percent), avoiding the imposition of overly burdensome and costly regulations on businesses (23 percent), saving their family and business money on energy costs (21 percent), and improving the environment and the quality of air and water (18 percent). 

When asked about specific energy proposals suggested by Congress and the Administration, micro-business owners were in favor of tax credits and proposals to reduce oil dependency. Eighty percent of survey respondents favored tax credits to individuals who implement specific energy-saving measures in their homes, and 76 percent favored grants and tax credits to small businesses to help them afford implementation of energy-saving measures in their business. Sixty percent favored increasing the use of nuclear power and the creation of new power plants, while 61 percent favored tax subsidies to energy companies to encourage the expansion of alternative energy sources. However, 58 percent of respondents opposed the creation of a cap-and-trade system that would limit emissions of greenhouse gases.

For the full survey results, please visit NASE's Research & Statistics web site.

House Passes $30 Billion Small Business Lending Bill

The House of Representatives recently passed legislation to create a $30 billion fund for community banks to increase lending to small businesses. The bill would provide $2 billion to support state efforts to increase loans to small businesses, and would also authorize $1 billion in matching funds for the Small Business Administration to match private investment in small startups. 

Banks using the fund must issue preferred stock to the Treasury Department and pay dividends based on how much they increase lending to small businesses. The dividend payments will decrease as lending increases.

The White House and Democratic leadership in Congress stressed that the legislation would not add to the national debt and projected that banks would use the fund to leverage up to $300 billion in loans for small businesses. Republicans argued that the bill would do little to increase lending with no guarantee the money would go to small businesses.

The bill, combined with a package of tax breaks to encourage investment in small businesses also passed by the House, now moves to the Senate.  The tax package would provide about $3.6 billion in tax breaks over the next decade. Provisions include the exclusion of long-term investors in some small businesses from capital gains taxes, and larger tax deductions for the start up expenses of new small businesses.

Health Reform: Keeping The Plan You Have

When it comes to health insurance, self-employed business owners have long purchased health coverage in the individual market or obtain coverage through a spouse. The new health care law, the Affordable Care Act, offers micro-businesses and the self-employed the choice to keep the plan that they already have, provided it meets certain requirements. Some of the most widely touted benefits under the new law for individuals include:

  • No lifetime limits on coverage for all plans;
  • No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application;
  • Extension of parents’ coverage to most young adults under 26 years old;

Visit the Obama Administration’s designated page for questions on what new benefits apply to your current plan, what additional benefits apply if you choose a new plan or if your current plan forfeits its grandfather status, and what changes would cause your current plan to forfeit its grandfather status.

The law includes a tax credit for small business premium contributions. It also offers coverage for certain preventative services with no cost sharing and patient protections such as guaranteed access to OB-GYNs and pediatricians. In 2014, health insurance Exchanges will offer additional savings, similar to that which Members of Congress receive.

For more details and Frequently Asked Questions on how your current health plan fits into the new health care law, visit healthreform.gov/NASE/grandfathering.html. 

Senate Committee Holds Hearing On Worker Misclassification

The Senate Committee on Health, Education, Labor & Pensions recently held a hearing, “Leveling the Playing Field: Protecting Workers and Businesses Affected by Misclassification,” to gather testimony on a proposed bill, the Employee Misclassification Prevention Act (S. 3254). 

Supporters of the legislation, such as Committee Chairman Tom Harkin (D-Iowa) and Deputy Secretary of Labor Seth Harris, contended that it would protect workers from unscrupulous employers attempting to cut costs by willfully misclassifying employees as independent contractors.

The bill’s critics, including Ranking Member Michael B. Enzi (R-Wyo.) and small business owner Gary Uber, maintained that it would unfairly penalize honest business owners and legitimate independent contractors. Uber argued for better enforcement of existing laws, and expressed concern that the bill’s increased regulations would discourage businesses from working with independent contractors.

The NASE opposes S. 3254 because it does not address the central problem of classification rules, namely that the term “employee” is ambiguous and it is difficult for small business owners to ensure proper worker classification. The bill focuses on increased enforcement and audits rather than on simplifying regulations, and also will increase accounting costs and the paperwork load on small businesses.

For more information on the NASE’s position, click here.

USDA, SBA Team Up To Offer Rural Small Biz Support

Agriculture Secretary Tom Vilsack and U.S. Small Business (SBA) Administrator Karen G. Mills announced that the two agencies have signed an agreement to encourage sustainable growth and development of rural small businesses. The announcement was made during the National Summit of Rural America, which gathered agricultural leaders, farmers, ranchers, community leaders, and residents of rural communities to share their vision and ideas that can help rebuild and revitalize rural America.

The agreement between the SBA and USDA is designed to reach out to people and places in rural areas and small communities with underserved financial needs. Prospective small businesses owned by minorities, women and veterans also are expected to benefit from this joint effort to encourage sustainable growth and development. USDA Rural Development's Rural Business Service will provide loan guarantees, loans and grants; the Small Business Administration will provide loan guarantees.

Key goals of this partnership include strengthening marketing and outreach by enabling each Agency's field offices to advise potential small business borrowers of the other Agency's credit programs that may support all or a portion of the small business' financing needs. USDA Rural Development and SBA field offices will exchange promotional and reference materials, including brochures and training schedules, and will distribute the other Agency's information to its field network and its potential applicants when appropriate.

USDA and SBA will also encourage their networks of resource partners to refer rural businesses to the other Agency's resources, where appropriate. Rural Development's network includes National and State Rural Partnership Councils, State and sub-State Offices, and Appropriate Technology Transfer to Rural Areas. SBA's network includes Small Business Development Centers, SCORE Chapters, U.S. Export Assistance Centers, Veteran Business Outreach Centers and Women's Business Centers. By mutual agreement, USDA and SBA may identify pairings of State and district offices to explore mutual best practices available to serve clients.

Read more here:

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Courtesy of NASE.org