Small Business Legislative Alert

Updates on Corporate Transparency Act, Power of Agencies, and ACA Ruling
Small Business Legislative Alert
If you watch the news these days it may be hard to remember that there is anything else going on in Washington besides the impeachment inquiry. In fact, there are quite a few large and small items left on Congress’ plate with limited time before the end of the year. The biggest of these is the fact that Congress either needs to pass a full set of...

If you watch the news these days it may be hard to remember that there is anything else going on in Washington besides the impeachment inquiry.  In fact, there are quite a few large and small items left on Congress’ plate with limited time before the end of the year.  The biggest of these is the fact that Congress either needs to pass a full set of appropriations bill or another extension by November 21. While members have been trying to work together to pass certain of the non-defense appropriations measures, it is looking more and more likely that another extension will be coming down the pike.

So what else of interest to small business has been happening in Washington of late? Let’s take a look.

Corporate Transparency Act

On October 22, 2019, the House passed the Corporate Transparency Act (H.R. 2513) by a vote of 249-173 with twenty-five Republicans joining two hundred twenty-four Democrats in voting for the measure, while five Democrats and one Independent joined one hundred sixty-seven Republicans in voting against the bill. If passed by the Senate in its current form, the Corporate Transparency Act would impose new reporting requirements on certain small businesses (specifically corporations and limited liability companies with twenty or fewer employees). The stated objective of the bill is to require companies to disclose their beneficial owners in order to prevent bad actors from using shell companies to break the law or hide illicit activity.

There is no word yet on whether the bill will be taken up by the Senate before the end of the year. The corresponding bill in the Senate (S.1978) currently has the bi-partisan sponsorship of Senators Ron Wyden (D-OR), Sheldon Whitehouse (D-RI) and Marco Rubio (R-FL) so there is the potential that the measure could move, whether on its own, or tacked on to some larger package.

Executive Orders Restraining Power of Agencies

Earlier this month, President Trump signed two executive orders with the goal of limiting federal agencies’ use of letters, memos and guidance.  Some argue that, in many areas, informal guidance (also known as sub-regulatory guidance), which is presented outside of the formal rulemaking process in which public input must be sought, can be helpful because they shed light on how the agencies interpret and view the laws and rules that they are tasked with enforcing. This is particularly true in highly technical or nuanced fields where a new law has gone into effect so that taxpayers have to comply with it but the agency has not been able to issue detailed regulations. However, there has been a growing concern about agencies taking this role one step further and using informal guidance to, in fact, create rules outside of the required rulemaking process.

Under the new executive orders, before issuing a “significant guidance document” agencies will be required to make the guidance available and seek public input.

ACA Ruling Expected

As we have previously reported, the latest significant challenge to the Affordable Care Act (ACA) is making its way through the federal court system.  Last December in the case of Texas v. Azar, a federal district court in Texas held, in short, that when the Tax Cuts and Jobs Act reduced the penalty for violating the ACA’s individual mandate to, it rendered the mandate and, in turn, the entire ACA unconstitutional.

This case is on appeal to the Fifth Circuit and the Fifth Circuit’s ruling is expected any day.  While there are few guarantees in Washington, it is as close to certain as things can get that any decision by the Fifth Circuit will be appealed to the Supreme Court.

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