DHIGov

 


ACTIVITIES OF NOTE:

4/05/11 - Govt Relations Newsletter

3/03/11 - 1099 Repeal

1/18/11 - The National Association of Wholesaler-Distributors - NAW - UPDATE

1/04/11 - House to Vote on Heath Care Reform Repeal

12/07/10 - President's tax deal announced

11/30/10 - 1099 Repeal Amendments Fail

7/26/10 - Senate - Small Business Lending Fund (SBLF)

7/12/10 - Formaldehyde Standards for Composite Wood Products Act

6/28/10 - Senate - Small Business Jobs and Credit Act of 2010

6/21/10 - H.R. 5486 - Small Business Jobs Tax Relief Act

6/18/10 - "Lead Renovation, Repair and Painting Rules"

6/17/10 - H.R. 5297 - Small Business Lending Fund (SBLF) Act of 2010

5/17/10 - FORM 1099 Update...Bill H.R. 5141, Small Business Paperwork Mandate Elimination Act Introduced

5/10/10 - Non-SBA Small Business Lending Initiative

3/12/10 - Health Care Legislation...Call-to-Action

3/04/10 - H.R. 2847. "Mini” Jobs bill update

3/03/10 - Senate. 2989. The Small Business Contracting Revitalization Act of 2010

Jan-March 2010 - Fire and Building Code Officials Attend Fire Door Training Class

2/26/10 - Fire Door Training of Healthcare Engineers in Central Florida

 

March 03, 2011    1099 Repeal

The House voted 314-112 to repeal the new Form 1099 reporting requirements that are unpopular with many associations and small businesses, but the offset in the bill has already drawn criticism from congressional Democrats and the White House. The House bill (H.R. 4) would repeal the expanded rules requiring businesses to issue a Form 1099 for payments to vendors exceeding $600, and would offset the provision's $17 billion cost by requiring people making 400 percent of the federal poverty limit to repay health insurance exchange subsidies if their income increases over the course of a year.

The offset did not sit well with the White House, which issued a statement saying it supports 1099 repeal but has "serious concerns" about the approach House Republicans have taken to pay for the repeal. The administration said H.R. 4 "would undo an improvement enacted with nearly unanimous support in the Medicare and Medicaid Extenders Act that eliminated an egregious 'cliff' in the tax system affecting middle-class taxpayers."

The House-passed bill is unlikely to get anywhere in the Senate, leaving the road to repeal somewhat uncertain. Senate Democrats already passed 1099 repeal language last month as part of an FAA Re-authorization bill but offset the cost by directing the Office of Management and Budget (OMB) to rescind unspent federal funds. The White House opposes this offset as well, saying it "could cause serious disruption in a wide range of services provided by the federal government."

Many associations support repeal of the expanded 1099 reporting requirements and has encouraged Congress and the administration to find a workable solution to the issue before businesses and associations have to start tracking purchases and preparing to comply with the reporting requirement next year.

January 18, 2011    Update from The National Association of Wholesaler-Distributors - NAW

The National Association of Wholesaler-Distributors - NAW (DHI is a member of the NAW) is on the Management Committee of the Coalition for a Democratic Workplace (CDW), the business coalition organized originally to fight the card check legislation.  With the card check bill not currently a legislative option for them, organized labor and the Obama Administration are turning their attention to helping labor build its membership by government regulation.  As a result, CDW has also turned its attention to the regulatory threat from regulatory agencies.

In the most recent fight, the National Labor Relations Board (NLRB) is planning to issue new rules that would require a business owner to grant access to its property to non-employee union organizers if the company permits other organizations onto the property.  More specifically, the rule would force a company to allow a labor union activist onto its property for the purpose of encouraging a boycott or other action harmful to the business if they allow a charity onto the property.

CDW has filed an amicus brief with the NLRB strongly opposing the new rule.  To view the brief, go to:
http://www.naw.org/files/CDWAmicusBriefNLRB.pdf

To view CDW's press release about the case and the brief, go to:
http://www.naw.org/files/PR_CDW_Roundys_Jan_7_2011.pdf

January 04, 2011     House to Vote on Heath Care Reform Repeal

As you have all read, the House Republicans will proceed almost immediately to begin the process of repealing the Obama Administration's Health Care Reform.

Specifically, the House will vote next Wednesday on legislation titled "Repealing the Job-Killing Health Care Law Act,"- a two-page bill that simply returns federal law to what it was prior to enactment of health care reform last year.

Following that vote, they will vote on a second piece of legislation - also only 2 pages long - to begin the process of replacing the current law with market-driven health care reform. The second piece of legislation will instruct specific House Committees to draft new health care reform legislation that achieves 12 specific goals.

Text of both pieces of legislation has already been posted on-line and can be read here:

http://rules-republicans.house.gov/Media/PDF/HR__-Repeal.pdf
http://rules-republicans.house.gov/Media/PDF/Replace_Res_xml.pdf

DHI has partnered with more than 225 other business organizations in the Start Over! Coalition in opposition to the health care reform bills enacted in 2010.  For more information, contact Jade West at jwest@nawd.org.

December 7, 2010      President's tax deal announced

The President has announced a tax deal with the Republicans.

  • The lower top income tax rate of 35 will be extended for two years for all incomes. There is a two year increase in the estate tax exemption to $5 million and the top rate will be 35 percent.
  • Businesses will be allowed to write off 100 percent of their capital investments for tax purposes during 2011. The current write-off is 50 percent.
  • Form 1099 repeal is not addressed in this deal, but Congress will likely address this issue before the end of this year's session.
  • It appears the R&D Credit will be extended through 2011. They have agreed to some other business extenders, but the details are still forthcoming.
  • The Alternative Minimum Tax (AMT) income patch is extended for 2010 and 2011.
  • There is also a reduction in the FICA tax for employees of two percent for one year. Self Employed individuals will get the two percent off of SECA.

November 30, 2010     1099 Repeal Amendments Fail

The Senate rejected both the Johanns and Baucus amendments to the Food Safety Reform bill that would repeal the Form 1099 requirement. 67 votes were needed to suspend the rules. The Johanns bill picked up 61 votes.

Additional opportunities to secure repeal are available through a lame duck session strategy that may afford efforts to get the repeal amendment attached to a bill likely to extend some of the Bush administration tax cuts.

It is looking more and more like the Congress will approve a short-short Continuing Resolution (CR) to fund the government for a couple of weeks further extending repeal efforts. CR is believed to run until December 17th.

July 26, 2010            Senate - Small Business Lending Fund (SBLF)

The Senate decided to remove the Small Business Lending Fund (SBLF) portion of the bill and then took a procedural vote to allow it to be added back in as an amendment. The SBLF is the $30 billion fund that would go to community banks and others to help with their small business lending.

SBLF has created an interesting split between Senate Small Business Committee Chair Mary Landrieu (D-LA) and Committee Ranking Republican Olympia Snowe (R-ME). Senator Landrieu supports creation of the SBLF. SBLC has supported it. The arguments in opposition have centered on the fact it will be a "TARP junior" (Troubled Assets Relief Program) and that extending recent improvements to SBA lending programs is a better alternative. Our understanding is most of the TARP like aspects have been removed and this is not structured as a bail out but as an incentive program for community banks and others. As far as SBA lending programs go, while we have no objections to them, the plain reality is by their design and purposes, they help very few existing businesses. A couple of sectors of membership of SBLC use them regularly but the most common call I get from SBLC member associations is after their members look at SBA programs, asking me "Is there anything else?"

There is a lot of good tax relief stuff in the bill ranging from an increase in the direct expensing allowance to easing the penalty for engaging in "listed transactions." The worst item in the bill is the doubling of the penalties for inadvertent errors in filing Forms 1099.

At the end of week, like the Senate, we were back to where we were at the beginning of the week, asking: Does the Senate Majority Leader have 60 votes to pass the small business lending and tax relief bill? And yes, it is possible the Senate will pass the bill and the House will hang around long enough to take it up and pass the Senate version before heading home.

ENVIRONMENTAL ISSUES
One environmental issue came off the table last week and one has been added. The one that came off the table is comprehensive "climate change" reform. No carbon tax this month. Senate Majority Leader Harry Reid (D-NV) said there is no time for it before the August recess. No kidding. As a practical matter, hard to see Congress acting on it in September.

Representatives Bobby Rush and Henry Waxman, Chairman of the Committee on Energy and Commerce, have introduced H.R. 5820, the Toxic Chemicals Safety Act of 2010, to revise the Toxic Substances Control Act (TSCA) of 1976, which governs the safety of chemicals in commerce. Senator Frank Lautenberg (D-NJ) has introduced a Senate bill.

TSCA is one of those laws that if you are affected by it, you know it. If you are not, you don't want to know.

Under the TSCA, the Environmental Protection Agency (EPA) has the authority to "compile, keep current, and publish a list of each chemical substance that is manufactured or processed in the United States." TSCA states that "the term 'chemical substance' means any organic or inorganic substance of a particular molecular identity, including - (i) any combination of such substances occurring in whole or in part as a result of a chemical reaction or occurring in nature, and (ii) any element or uncombined radical." TSCA does not include chemical substances subject to other US statutes such as foods and food additives, pesticides, drugs, cosmetics, tobacco, nuclear material, or munitions. What we often hear about is the "TSCA inventory." The inventory includes more than 84,000 chemical substances.

The bill makes some changes which the environmental advocates' community has sought and as I understand it there are some changes sought by the industries most directly affected. No surprise, there are some things in it with which the business community disagrees.

July 12, 2010            Formaldehyde Standards for Composite Wood Products Act

NATIONAL STANDARDS

On July 7, 2010, the President signed into law the Formaldehyde Standards for Composite Wood Products Act. The bill creates a national standard for formaldehyde use based on an existing California standard. The bill sailed through the House and Senate with little fanfare and it was supported by those industries that had the most direct interest in formaldehyde use in composite wood products.

There are several back stories here. The first (which everybody recognizes so not exactly earth-shattering news) is that California rules the world. We see it with Prop 65, mattress flammability, clean air standards and a host of other initiatives. The saying among those who watch consumer protection and environment issues, is "Watch for the first sign in Europe, keep an eye on it as it sails over our continent and lands in California, brace yourself for the bounce back to the East Coast states, and then hold on as it slowly creeps inland from the West and East."

The second back story is the adoption of a national standard. For years, states' rights advocates in Congress put up strong resistance to the adoption of national standards of any kind (businesses, with some exceptions, generally thought they were better off with the states). With the passage of the Consumer Product Safety Improvement Act (CPSIA), we heard a significant change in the tone of the debate (although, it turns out some states have found soft spots in the CPSIA's national application and Prop 65 was exempt from the get-go).

Laws, like the Regulatory Flexibility Act, added on the books decades ago to help leverage mitigation relief may be more important than ever.

Back to the new law. The formaldehyde standards are based on the regulations in place in California. It establishes national technology-based limits (i.e., limits based on the technological feasibility of the standards) on formaldehyde emissions from most composite wood products. It does so by requiring EPA to issue regulations, not later than January 1, 2013, to apply formaldehyde emissions standards that are equivalent to the California standards for hardwood plywood, medium density fiberboard, and particleboard that is sold, supplied, offered for sale, or manufactured anywhere in the United States. EPA's regulations must ensure compliance with the federal standard and must include provisions relating to labeling, chain of custody requirements, provisions for sale of products or finished goods that were manufactured before the compliance deadline but are allowed to continue to be sold within a specified time period after the deadline (or product ''sell-through''), third-party testing and certification, and other matters of implementation. Under the law, the new limits will go into effect 180 days after EPA issues its regulations.

FORM 1099
The Internal Revenue Service (IRS) has issued Notice 2010-51 asking for comments on how to implement the send-everybody-a-1099 requirement.

Go to www.irs.gov to find out how to file comments electronically.

SBLC AND THE FISCAL COMMISSION
Earlier this year, with Congress unable to find a way to do what it wanted to do, President Obama established the bi-partisan National Commission on Fiscal Responsibility and Reform by executive order. The Fiscal Commission has 18 bi-partisan members including several Senators and Representatives. It is co-chaired by former White House Chief of Staff Erskine Bowles and former Senator Alan Simpson (R-WY). The Fiscal Commission is to report back to the President by December on ways to cut the deficit. It needs 14 votes for any recommendation which should make life interesting for Bowles and Simpson.

 June 28, 2010            Senate - Small Business Jobs and Credit Act of 2010

The Senate is scheduled to take up H.R. 5297, the Small Business Jobs and Credit Act of 2010 that provides lending relief and tax relief. The bill is actually the combination of two bills recently passed by the House.

H.R. 5297 would establish a $30 billion fund to boost lending to small businesses. Under the proposal, the SBLF would support lending among community and smaller banks with assets under $10 billion. The bill would allow eligible institutions with assets of $1 billion or less to apply for a capital investment from the Fund of up to 5 percent of risk-weighted assets. It would allow eligible institutions with assets of between $1 billion and $10 billion to apply for a capital investment from the Fund of up to 3 percent of risk-weighted assets. The new program would provide an incentive for smaller banks to increase small business lending – as their lending increases, the dividend rate or interest rate payable to Treasury gets reduced, to as low as 1 percent for banks that increase lending by 10 percent from a 2009 baseline.

The bill would create a Small Business Borrower Assistance Program (SBBAP). Under the SBBAP, small businesses that obtain a SBA 7(a) loan (except revolving credit line loans) in the amount of $300,000 or less will receive a reserve equal to 6 percent of their small business loan principal "to help them make payments through the ups and downs of a cash flow cycle." according to Representative Schrader, author of the SBBAP idea. Small businesses will automatically be enrolled in the SBBAP if eligible, unless the business specifically requests otherwise. In order to qualify, borrowers must obtain a qualifying loan within one year after the SBA issues final regulations for the program.

The borrower would request payments to be made as needed and the payments made by the SBA under the program shall only be made to the lender or servicer of a qualifying small business loan to be applied against outstanding principal or interest, and may not be made to the borrower.

The bill would exclude from gross income any amounts that are received under the SBBAP.

The bill provides some additional tax reductions for owners of a special type of small business stock. Under current law, Internal Revenue Code (IRC) Section 1202 provides a 50 percent exclusion for gain from the sale of "certain" small business stock that is held for more than five years. The amount of gain eligible for the Section 1202 exclusion is limited to the greater of 10 times the taxpayer's basis in the stock, or $10 million gain from stock in that small business corporation. The non-excluded portion of section 1202 gain is taxed at the lesser of ordinary income rates or 28 percent, instead of the lower capital gains rates for individuals. The term "certain" is based on the fact there are several specific conditions related to the nature of the stock that severely limit eligibility.

The American Reinvestment and Recovery Act temporarily increased the Section 1202 exclusion to 75 percent for qualifying stock acquired in 2009 and 2010.

The bill would temporarily increase the amount of the exclusion to 100 percent for qualifying stock acquired after March 15, 2010 and before January 1, 2012.

Under current law, IRC Section 6707A imposes a penalty on the failure to disclose a "reportable transaction" on any tax return or information statement. There are six categories of reportable transactions, one of which is a "listed transaction." A "listed transaction" is a type of transaction identified by the IRS through guidance as a tax avoidance transaction. The penalty for failure to disclose a reportable transaction (other than a listed transaction) on a return is $10,000 in the case of individuals and $50,000 in any other case. For listed transactions, the penalty is $100,000 in the case of individuals and $200,000 in any other case. The Internal Revenue Service has taken the position it has no latitude to mitigate penalties and must assess the full penalty for inadvertent violations.

The bill would make the penalty for failing to disclose reportable transactions (including listed transactions) proportionate to the underlying tax savings.

Under current law, business expenditures are deductible against related business income even if they are financed with non-recourse debt. However, in order to prevent taxpayers from engaging in certain types of tax shelters, Congress enacted the "at-risk" rules to prevent taxpayers from using expenses financed with non-recourse debt to shelter unrelated income. There are exceptions to the at-risk rules in situations where Congress believed that, even though a project was financed with non-recourse debt, that it is likely that the financing will be repaid and that the purchaser will have real equity in property financed with the non-recourse debt (e.g., real estate).

The bill would provide an exception to the "at-risk" rules for non-recourse loans that are guaranteed by the Small Business Administration (SBA). The passive activity loss rules would still apply to these expenses to prevent taxpayers from engaging in tax shelter transactions.

Under current law, taxpayers may deduct up to $5,000 in trade or business start-up expenditures. The amount that a business may deduct is reduced by the amount by which start-up expenditures exceed $50,000. Start-up expenditures are defined as expenses paid or incurred in connection with investigating the creation of a business, and do not include expenses that would otherwise be allowed to be expensed (i.e., capital or equipment investments).

For taxable years beginning in 2010 or 2011, the bill would increase the limit on the tax deduction for trade or business start-up expenditures from $5,000 to $20,000, and increase threshold amount for reducing such limit to $75,000.

In one respect, it would be nice if the Senate just took up the House bill and passed it. But, this being the Senate, no way that is going to happen. We know that there will be a manager's amendment at a minimum including a bonus depreciation revival.

Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) introduced S. 3513, The Bonus Depreciation Extension to Create Jobs Act. The bill would extend the 50 percent bonus depreciation through 2010. The most recent version of bonus depreciation was enacted as part of the 2008 economic stimulus efforts. The American Reinvestment and Recovery Act extended bonus depreciation, but the provision expired at the end of 2009.

The word is it will be in the manager's amendment.

TAKING SMALL BUSINESS OUT OF THE EQUATION
Senator Bernie Sanders (I-VT) has introduced legislation, S.3533, the Responsible Estate Tax Act, to reinstate the estate tax that would provide for the minimum exemption at the 2009 level of $3.5 million for an individual. The top rate would be 45 percent for the excess, until you get to $10 million and the top rate goes up to 50 percent on the excess. When you hit $50 million the top rate goes up to 55 percent on the excess. Another 10 percent surtax to be addedon estates over $500 million.

The measure calls for some additional relief for farmers, allowing them to reduce the value of their farmland by $3 million.

There are a couple of technical changes that may have some potential negative impact on some small businesses but in the scope of things not of major magnitude.

June 21, 2010            H.R. 5486 - Small Business Jobs Tax Relief Act

The House passed H.R. 5486, the Small Business Jobs Tax Relief Act of 2010, on June 15, 2010, by a 247-170 margin. The bill has been combined with a small business lending bill, H.R. 5297, that has also been approved by the House, and the new combined bill has been sent to the Senate. Senate Majority Leader Harry Reid (D-NV) has said he hopes to bring the bill to the floor as soon as possible. The new bill will travel to the Senate as H.R. 5297 but with a new title, the Small Business Jobs and Credit Act of 2010.

The following are provisions of H.R. 5486: Small Business Stock Under current law, Internal Revenue Code (IRC) Section 1202 provides a 50 percent exclusion for gain from the sale of "certain" small business stock that is held for more than five years. The amount of gain eligible for the Section 1202 exclusion is limited to the greater of 10 times the taxpayer's basis in the stock, or $10 million gain from stock in that small business corporation. The non-excluded portion of section 1202 gain is taxed at the lesser of ordinary income rates or 28 percent, instead of the lower capital gains rates for individuals. The term "certain" is based on the fact there are several specific conditions related to the nature of the stock that severely limit eligibility.

The American Reinvestment and Recovery Act temporarily increased the Section 1202 exclusion to 75 percent for qualifying stock acquired in 2009 and 2010. H.R. 5486 would temporarily increase the amount of the exclusion to 100 percent for qualifying stock acquired after March 15, 2010 and before January 1, 2012.

Small Business Penalty Relief Under current law, IRC Section 6707A imposes a penalty on the failure to disclose a "reportable transaction" on any tax return or information statement. There are six categories of reportable transactions, one of which is a "listed transaction." A "listed transaction" is a type of transaction identified by the IRS through guidance as a tax avoidance transaction. The penalty for failure to disclose a reportable transaction (other than a listed transaction) on a return is $10,000 in the case of individuals and $50,000 in any other case. For listed transactions, the penalty is $100,000 in the case of individuals and $200,000 in any other case. The Internal Revenue Service has taken the position it has no latitude to mitigate penalties and must assess the full penalty for inadvertent violations.

H.R. 5486 would make the penalty for failing to disclose reportable transactions (including listed transactions) proportionate to the underlying tax savings. SBA Non-recourse Loans Treated as At-risk Under current law, business expenditures are deductible against related business income even if they are financed with non-recourse debt. However, in order to prevent taxpayers from engaging in certain types of tax shelters, Congress enacted the "at-risk" rules to prevent taxpayers from using expenses financed with non-recourse debt to shelter unrelated income. There are exceptions to the at-risk rules in situations where Congress believed that, even though a project was financed with non-recourse debt, that it is likely that the financing will be repaid and that the purchaser will have real equity in property financed with the non-recourse debt (e.g., real estate).

H.R. 5486 would provide an exception to the "at-risk" rules for non-recourse loans that are guaranteed by the Small Business Administration (SBA). The passive activity loss rules would still apply to these expenses to prevent taxpayers from engaging in tax shelter transactions. Increase Deduction for Start-up Expenditures Under current law, taxpayers may deduct up to $5,000 in trade or business start-up expenditures. The amount that a business may deduct is reduced by the amount by which start-up expenditures exceed $50,000. Start-up expenditures are defined as expenses paid or incurred in connection with investigating the creation of a business, and do not include expenses that would otherwise be allowed to be expensed (i.e., capital or equipment investments).

For taxable years beginning in 2010 or 2011, H.R. 5486 would increase the limit on the tax deduction for trade or business start-up expenditures from $5,000 to $20,000, and increase threshold amount for reducing such limit to $75,000. Small Business Borrower Assistance Program H.R. 5486 would exclude from gross income any amounts that are received under the Small Business Borrower Assistance Program (SBBAP). The SBBAP, however, does not exist yet. It is to be created by another bill, H.R. 5297, which the House has also passed. The SBBAP would provide assistance to small businesses that are struggling to meet their obligations to creditors.

June 18, 2010            "Lead Renovation, Repair and Painting Rules"

Environmental Protection Agency (EPA) Announced That It Will Not Enforce Actions for Violations of the Lead Renovation, Repair and Painting Rule Until October 2010.

On June 18, the Environmental Protection Agency (EPA) announced the delay of enforcement of the new Lead Renovation, Repair and Painting (RRP) regulations that had been put into effect on April 22, 2010. The delays, as stated in a June 18 EPA memo are: • Until October 1, 2010, EPA will not take enforcement action for violations of the RRP Rule's firm certification requirement. (It should be noted, however, that only the certification requirement is delayed and that failing to follow safe work processes will trigger a violation). • For violations of the RRP Rule's renovation worker certification requirement, EPA will not enforce against individual renovation workers if the person has applied to enroll in, or has enrolled in, by not later than September 30, 2010, a certified renovator class to train contractors in practices necessary for compliance with the final rules. Renovators must complete the training by December 31, 2010.

Full Story: http://www.aamanet.org/news/1/10/0/all/346/epa-announces-delay-of-lead-renovation-repair-and-painting-rules-enforcement-
To read the EPA memo: http://www.aamanet.org/news/1/10/0/all/346/epa-announces-delay-of-lead-renovation-repair-and-painting-rules-enforcement-

June 17, 2010            H.R. 5297 - Small Business Lending Fund (SBLF) Act of 2010

The House passed H.R. 5297, the Small Business Lending Fund (SBLF) Act of 2010, on June17, 2010 by a 241-182 margin. The bill has been combined with a small business tax relief bill, H.R. 5486, which the House has also passed. Senate Majority Leader Harry Reid (D-NV) has said he hopes to bring the combined bill to the floor as soon as possible. The new bill will travel to the Senate as H.R. 5297 but with a new title, the Small Business Jobs and Credit Act of 2010.

H.R. 5297 would establish a $30 billion fund to boost lending to small businesses. Under the proposal, the SBLF would support lending among community and smaller banks with assets under $10 billion. The bill would allow eligible institutions with assets of $1 billion or less to apply for a capital investment from the Fund of up to 5 percent of risk-weighted assets. It would allow eligible institutions with assets of between $1 billion and $10 billion to apply for a capital investment from the Fund of up to 3 percent of risk-weighted assets. The new program would provide an incentive for smaller banks to increase small business lending – as their lending increases, the dividend rate or interest rate payable to Treasury gets reduced, to as low as 1 percent for banks that increase lending by 10 percent from a baseline set in 2009.

Small Business Borrower Assistance Program
The House approved an amendment to H.R. 5297, offered by Representative Kurt Schrader (D-OR), creating a Small Business Borrower Assistance Program (SBBAP). Under the SBBAP, small businesses that obtain a SBA 7(a) loan (except revolving credit line loans) in the amount of $300,000 or less will receive a reserve equal to 6 percent of their small business loan principal "to help them make payments through the ups and downs of a cash flow cycle." according to Representative Schrader. Small businesses will automatically be enrolled in the SBBAP if eligible, unless the business specifically requests otherwise. In order to qualify, borrowers must obtain a qualifying loan within one year after the SBA issues final regulations for the program.

The borrower would request payments to be made as needed and the payments made by the SBA under the program shall only be made to the lender or servicer of a qualifying small business loan to be applied against outstanding principal or interest, and may not be made to the borrower.

As noted above, H.R. 5486, as passed by the House, would mitigate the tax consequences of receiving such assistance. And, as also noted, H.R. 5486 has now been rolled into H.R. 5297.

May 17, 2010            FORM 1099 Update - H.R. 5141, Small Business Paperwork Mandate Elimination Act Introduced

As a result of a new law signed this year, beginning with payments made in 2012 every business will be required to issue to any vendor of services OR property to which the business has paid more than $600 a year for those services or property, an information reporting form known as Form 1099.  The Form 1099 must also be sent to the Internal Revenue Service.  In addition to issuing the forms, a business will have to get Taxpayer Identification Numbers (TINs) from all of those vendors and withhold payments to any such vendor until it receives the TIN.  Penalties apply if you fail to issue the Forms 1099.

Under the existing law, businesses issue the Form 1099 only to individuals who provide services to a business.  The new law makes two changes: the Form 1099 must be issued to corporations of all sizes and shapes as well as to individuals AND a Form 1099 must also be issued to individuals and corporations that provide property to a business.
 
The payments that are included under this are not only those made directly by check but also those made by other means such as credit cards, for example.  Think about the airlines, hotels, rental cars, and restaurants that appear on your credit card bill.  You might not think of them as vendors of goods and services, but that is what they are.  Also, if you are in the business of selling or distributing goods, all of your suppliers of products are also vendors under the new law [Under existing law there are regulations that provide narrow exceptions for some types of vendors (telegrams, telephone, freight, storage) and some individual vendors that accept payment from you by credit card and meet qualifications set forth by the IRS.  Even if some regulatory exceptions are carried over under the new law, you will still be the one responsible and liable for issuing the information report and it will not be easy.] Congress is considering doubling the penalties.

And, of course, any business that pays you more than $600 will be sending you a Form 1099.

Representative Daniel Lungren (R-CA) has introduced legislation to repeal the requirement.  The bill is H.R. 5141, The Small Business Paperwork Mandate Elimination Act.

If you want to send e-mails to your Senators and Representative, go to www.stopform1099.org.

But do not stop there, call your Senators and Representative (202-224-3121) and deliver the message you will find at www.stopform1099.org.

May 10, 2010            Non-SBA Small Business Lending Initiative

At the moment there has been no substantive progress on any effort to provide help to small businesses that are still having trouble finding working capital and inventory financing loans.  You may recall that the President had proposed using “left-over” Troubled Asset Relief Program (TARP) funds.  The House Committee on Financial Services is scheduled to hold a hearing on the proposal on Tuesday.

The President originally proposed a new $30 billion Small Business Lending Fund (SBLF).  Under the proposal, the SBLF would support lending among community and smaller banks with assets under $10 billion.  Banks with less than $1 billion in assets would be eligible to receive capital investments up to 5 percent of their risk-weighted assets. Banks between $1 billion and $10 billion in assets would be eligible to receive capital investments up to 3 percent of their risk-weighted assets.

The theory is the proposed design of the new program would provide an incentive for smaller banks to increase small business lending – as their lending increases, the dividend rate payable to Treasury gets reduced, to as low as 1 percent for banks that increase lending by 10 percent from a baseline set in 2009.

Since the original announcement, the Administration has indicated that SBLF would be separate and distinct from TARP and participating banks would not be subject to TARP conditions.  As the Administration has acknowledged, “Previous TARP programs may have seen reduced participation as a result of several factors, including certain statutory restrictions.  Smaller institutions, in particular, have struggled with the executive compensation restrictions that are the same for all institutions, regardless of size.  Moreover, after conducting extensive consultation, our view is that even if we removed some of the restrictions described above, many lenders would decline to participate due to a belief that a ‘stigma’ is associated with the TARP program.  This belief – as well as fear that by virtue of being a TARP recipient, an institution could be subject to retroactive disadvantages, such as exclusion from future Congressional tax relief available to non-TARP recipients – would likely have the impact of discouraging participation in the program even if the lender might otherwise have taken part.”

Legislation is required to set up the separate SBLF program. I expect that the House Committee on Financial Services will move to mark up a bill shortly after the hearing and I expect House approval at some point in the near future.  Getting the Senate to focus on this is a different story.

 

 March 12, 2010            Health Care Legislation...Call-to-Action

The “watershed” moment in the frantic push to enact health care reform legislation despite public opposition is expected to occur on March 18th in the U.S. House of Representatives.  On this date, the House Democratic leadership, with the support of President Obama, will attempt to have the House first approve the Senate-passed health care bill (thus clearing the bill for the President to sign into law) and then approve a “reconciliation” bill that makes changes to that bill that will have been “pre-approved” by majorities in both the House and the Senate. 

A total of 217 votes will be needed for passage by the House, both for the Senate-passed health care bill and the “reconciliation” bill.  These are the critical votes which will decide the ultimate outcome of the health care reform debate.  The good news is that the outcome is not pre-ordained. 

Either side could win a razor-thin victory.  This legislation is opposed by roughly 50% of the public, and many Members of Congress who would otherwise support it are wavering as a result.  The voices of their constituents will therefore have an especially strong impact on their final decision.  So, you can truly sway votes by acting.

Contact your U.S. Representative today.  Let your Representative know you want Congress and the President to START OVER and work on a bipartisan basis to craft market-based reform legislation that will “get it right” and reduce, not increase, health care costs.

CONTACT YOUR ELECTED LEADERS

Find your U.S. Senator:

senate.gov

Find your U.S. Representative:

house.gov

 

March 4, 2010            H.R. 2847 - "Mini” Jobs bill update

On March 4th, 2010, Staff of Congressman James Moran were visited by DHI staff and DHI president James Tartre, CDC, to discuss Jobs Creation, Appropriation request, competitive grants in the Rayburn Building on Capitol Hill.

he creation of jobs is a major push in the administration right now. DHI staff discussed the fire door inspection training program, school construction and renovation, the availability of training dollars to supplement our training efforts.

 

March 3, 2010            Senate. 2989 - The Small Business Contracting Revitalization Act of 2010

Staffers for the Senate Committee on Small Business and Entrepreneurship were visited by DHI staff and DHI president James Tartre, CDC

in U.S. Senate Dirksen's Office on Capitol Hill to discuss To discuss Senate bill 2989, The Small Business contracting Revitalization Act of 2010.

On March 4th, the U.S. Senate Committee on Small Business and Entrepreneurship unanimously passed S.2989, The Small Business Contracting Revitalization Act of 2010. This bill will modernize and strengthen the Small Business Administration’s government contracting programs to help increase sales to small business. This legislation is designed to make it easier for small businesses to navigate federal contracts and will mandate that the prime contractor explain in detail who they plan on using as subs on a federal job.

 

March 3, 2010            Fire and Building Code Officials Attend Fire Door Training Class

Fire Marshals for the state of Missouri, in addition to the top fire officials from numerous counties, attended these fire door inspection training sessions. Over 120 officials received instruction over three (3) different sessions in January, February and March 2010.

Conducted by the Door Security & Safety Foundation, these programs create awareness of the fire door inspection program to local Authorities Having Jurisdiction (AHJs). Education must provided to those AHJ who will directly affect the enforcement of the NFPA 80 fire door standard. The more aware and better educated the AHJ community is in regards to the inspection of fire doors and doors of egress, the better the chance for enforcement of the standard.

 

February 26, 2010            Fire Door Training of Healthcare Engineers in Central Florida

Fire Door training class of healthcare engineers was conducted in Central Florida.This class was a direct result of the Foundation’s training session conducted back in September 2009 at the 35th annual Conference & Exposition in Orlando, FL.

Officials from the Agency for Health Care Administration in Florida were in attendance at the Foundation’s AHJ fire door class in September 2009 and felt the course would be very beneficial to the health care engineers that work in the long-term healthcare facilities on a daily basis.

If enforcement of the fire door inspection program is to take hold, facility engineers are yet another group that needs to be aware of the standard. These engineers are the individuals, particularly in healthcare, that provide the day-to-day inspections, maintenance and recommendations on fixes that need to take place. The better educated they are on how a fire door should be properly maintained, the more they will be able to cite fixes that need to be made and ultimately reach out to a trained DHI member for repair of a more complicated opening.