Weekly Legislative Update - August 6, 2018

House Passes First Part of Tax Reform 2.0
Ways and Means Chairman Brady released "Tax Reform 2.0 Listening Session Framework" with goals for further reforms to the tax code this year. Moving fast, Brady brought a large piece of his plan to the House floor and passed bills repealing the medical device tax, modernizing healthcare savings accounts, reforming water and agriculture taxes, improving Social Security services, and ensuring IRS workforce integrity, before the House adjourned till September 4th.
Any one of these bills, especially H.R. 184 (Medical Device Tax Repeal, et al) and H.R. 6199 (Modernizing Health Savings Accounts) could be modified in the Senate to pass the tax extenders which, to this point, form no part of Brady's "listening session framework."
Brady plans to enact the other key parts of his framework-reforming tax-favored retirement plans and making permanent TCJA's tax cuts for individual and pass-through taxpayers-in early September.

Another Brady goal, welfare reform, reported to the House in June in the "JOBS for Success Act" (HR 5861) will most likely see a House vote in September because the current welfare program expires September 30th. However, it's unlikely welfare reform written by Republicans in Ways and Means will get very far; the Senate may end up reauthorizing the current program.  
Previously, we recommended a lobbying plan and arguments to achieve our goals for permanent extension of WOTC plus Empowerment Zone and Indian Employment tax credits, as well as repealing the BEAT tax's claw-back of WOTC credits of large employers. These Coalition goals remain the same, targeting especially GOP members of Ways and Means and all members of Senate Finance.

Repeal of the BEAT claw-back is especially important. A 2001 GAO study based on a sample of 6,500 employers found that employers with $1 billion or more in gross receipts accounted for 66 percent of all WOTC credits over a two-year period. The average credits received by employers of all size was more than $300,000.

The same study (GAO-01-329) reinforces evidence that so-called "windfall credits," caused by employers hiring someone they would have hired anyway, is minimal; 87 percent of employers in the study said they hired WOTC workers because of the tax credit.

Our task, now that most House members are at home for an entire month campaigning for re-election, is to re-double our efforts in a final attempt to persuade Ways and Means Republicans to win Chairman Brady over to permanent WOTC. Now is the time for face-to-face visits with your Republican congressperson and any Republican House members of your state who have a seat on Ways and Means. If your congressperson is a Democrat, make your case and also ask them to reach out to a Democrat from your state who sits on Ways and Means.

WHCSB Act of 2018 (HR 6446): Introduction and Next Steps
We have a bill number!
 
H.R. 6446, the "White House Conference on Small Business Act of 2018," was introduced on July 19 by Reps. Rod Blum (R-IA), Stephanie Murphy (D-FL), and Al Lawson (D-FL) and referred to the House Committee on Small Business. The new Section 11 was added to help be inclusive as to the territories via the bill's definition of "states."

Organizing & Executing the Next
White House Conference on Small Business (WHCSB)

12091
 
All three Conferences shared similar organizational formats and activities performed, with differences generated in process and outcomes. To their credit, each of the three Conferences issued 60 policy recommendations for Congress and the Administration to consider. In addition, the 1995 Conference delegates elected regional implementation teams which worked closely with Small Business Administration (SBA) officials in monitoring congressional and executive branch action on the 1995 Conference's recommendations after the Conference had ended. The SBA attributed much of the 1995 Conference's implementation "success rate" to the efforts of these implementation teams. CRS noted that the 1980 Conference included participation from over 200 small business and trade associations.
 
A critical piece to the success of the WHCSB is the utilization of state conferences to ensure broad and equitable representation of the very diverse small-business community. Through the state conferences, which feed into the regional conferences and then into the national conference, small-business owners can develop, enhance and fully embrace the key issues facing small businesses nationwide. In addition to building consensus, growing small-business networks and nurturing future small-business leaders, the state conferences and broad participation of small businesses lend credibility to the final list of recommendations.
 
Despite action and success on a variety of issues impacting small business, there has not been a White House conference in more than two decades. That is far too long to go without giving voice and a forum to America's small businesses which account for 99 percent of U.S. private sector employers and 64 percent of net new private sector jobs. The 115th Congress should reunite the wide variety of voices within the small business community to help educate Congress and the White House on issues that matter most to small businesses. Just as in 1995, we can leverage the collective strength and voice of small business, to make it easier to do business with the federal government, create jobs and prosperity for our country.

H.R. 6446: Action Requested

H.R. 6446
 
This legislation is necessary in the near-term to ensure that small business issues remain at the forefront of policy discussions and also to ensure small business has a voice at the highest levels of the American government. 

FACT SHEET for H.R. 6446
  • H.R. 6446, the "White House Conference on Small Business (WHCSB) Act of 2018," was introduced on July 19, 2018 by Reps. Rod Blum (R-IA), Stephanie Murphy (D-FL), and Al Lawson (D-FL) and has been referred to the House Committee on Small Business.
  • H.R. 6446 reauthorizes, and amends, the White House Conference on Small Business Authorization Act from the early 1990s, which is Public Law 101-409.
  • As currently drafted, the H.R. 6446 requires the state conferences, regional conferences and the National Conference to occur no earlier than December 31, 2018 and no later than December 1, 2019.
  • 1,904 delegates attended the most recent National Conference held in 1995. H.R. 6446 authorizes delegates to the National Conference to include one delegate appointed by each Governor or State, one delegate appointed by each Member of the Senate, one delegate appointed by each Member of the House, additional delegates appointed from the respective state conferences, and one hundred delegates appointed by the President.
  • The Small Business Administration (SBA) would help facilitate the management and operations for all three levels of the WHCSB. H.R. 6446 authorizes the White House Conference of Small Business Commission, an eleven person Commission appointed by the President, to run the day-in and day-out logistics. The Chief Counsel for Advocacy of the SBA would serve as the Chairperson of this Commission.
  • The Commission in 1995 was required to submit a final report, including the findings and recommendations of the delegates, as well as proposals for any legislative and/or executive branch action necessary to implement the recommendations, to the President and Congress no later than four months from the date the National Conference convened.
  • The SBA was required to report to Congress annually for three years following the delivery of the final report on the status and implementation of the findings and recommendations.
  • H.R. 6446 also recognizes and emphasizes the use of modern technology and communications to not only cut down costs, but to also increase the effectiveness in the process with a provision to "establish an electronic communication system for use by delegates and alternates for communication before, during, and for at least 4 years after the National Conference to allow State delegations and issue area groups to collaboratively define the problems faced by small businesses, refine suggested solutions to those problems, prioritize and select final recommendations, and monitor later legislative or regulatory action on the recommendations.''
  • This legislation would allow the Small Business Administration (SBA) to accept monetary and non-monetary resources from non-Federal sources to fully fund each of three layers of the WHCSB: state conferences, regional conferences, and the National Conference to be held in Washington, DC.