April Policy Watch #HillUpdate: The House Has Been Busy Tackling IRS Reforms, Financial Rules, the Next NDAA & More

HSBC Chairman Chabot Urges Inclusion of Small Business Bills in FY19 NDAA

Last week before the House Committee on Armed Services, Chairman Steve Chabot of the House Small Business Committee urged members to incorporate a package of 13 bipartisan small business bills in the FY 2019 National Defense Authorization Act. The bills include legislation addressing SBA loan programs and technical assistance programs such as Women Business Centers, small business lending, cybersecurity, government contracting, and other issues impacting small business.

Read a full accounting of bills included in the package can be found here.

Watch Chairman Chabot’s testimony.

Legislation to Reform & Modernize the IRS Makes it Out of House Ways & Means

The House Ways and Means Committee last week approved the passage of the Taxpayer First Act (H.R. 5445), legislation sponsored by Oversight Subcommittee Chairman Lynn Jenkins (R-KS) and ranking member John Lewis (D-GA). The bill would improve the independent appeals process, taxpayer services and enforcement. It also updates the IRS and Tax Court structure.

Click here to learn more about the legislation and other recent bills relating to IRS reform passed out by the House Ways & Means Committee.

House Passes Bill to Ease Financial Regulations with Goal of Improving Lending

The House approved H.R. 4790, the Volcker Rule Regulatory Harmonization Act by a vote of 300-104. The legislation would exempt banks with total assets of $10 billion or less and comprised of 5% or less of trading assets and liabilities from the Volcker Rule. The rule prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private-equity funds. The bill would also grant exclusive rulemaking authority under the Volcker Rule to the Federal Reserve Board. The intent of the legislation is to alleviate the compliance burden on small banks, which would help improve capital markets and lending, especially to small business.

Read more

With Possible Trade War Looming, HSBC Holds hearing on the State of Trade for Small Business

The House Small Business Committee heard from a panel of business owners and experts on the state of international trade for small businesses. The hearing’s focus was the State Trade and Export Promotion (STEP) Grant Program and the federal government’s overall efforts to increase small business exports. However, with tariffs proposed by the administration and discussion of a possible trade war with China, witnesses highlighted how recent activity would impact their businesses and small business exporters at large.

Read submitted testimony or watch the full hearing here.

April Policy Update

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FY2018 Omnibus Spending Package Signed into Law

On March 23, President Donald Trump signed a $1.3 trillion omnibus spending bill for FY2018—10 percent higher than FY2017 due to the budget agreement reached last month by lawmakers.

The Small Business Administration (SBA) received $18 million less than in FY2017.  SBA received $247 million for entrepreneurial development grants including $130 million for Small Business Development Centers; $18 million for Women’s Business Centers; and $11.5 million for the SCORE program. SBA’s business loan program will have new authority to guarantee $29 billion in 7(a) loans.

For government contractors, passage of this bill means a compressed procurement and grant cycle. The new Fiscal Year started in October but has just now been funded. That means agencies have one quarter instead of four to procure goods and services.

Here is a chart of WIPP’s FY2018 appropriations requests and what was included in the FY2018 Omnibus bill signed by the president.

FY2018 Entrepreneurship Funding Update

Small Business Administration – Financial Services and General Government Appropriations

Program FY17 Enacted FY18 WIPP Requests  

FY18 Omnibus

Microloan Program:  Lending $44 million $44 million  

$36 million

Microloan Program:  TA $31 million $31 million  

$31 million

PRIME $5 million $10 million $5 million
Women’s Business Centers $18 million $21.75 million  

$18 million

SBA Office of Advocacy $9.22 million $9.3 million  

$9.12 million

 

Small Business 7(a) Lending Oversight Reform Act of 2018 Unanimously Approved in Both the House & Senate Small Business Committees.

Legislation (H.R.4743/ S.2283) to increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program for the purpose of improving the efficiency and reach of the program, passed both the House and Senate Small Business Committees. The Small Business 7(a) Lending Oversight Reform Act of 2018 would:

  • Strengthen SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director
  • Enhance SBA’s lender oversight review process, including increasing the office’s enforcement options
  • Require SBA to detail its oversight budget and perform a full risk analysis of the program on an annual basis
  • Strengthen SBA’s Credit Elsewhere Test by clarifying the factors that must be considered

Read the House Small Business Committee’s Press Release here.

Chabot Supports Bill to Ensure Small Contractors Get Paid Quickly

House Small Business Committee Chair Steve Chabot (R-OH) released a statement recently in support of Rep. Steve Knight’s (R-CA) bill, the Accelerated Payments for Small Businesses Act, encouraging federal agencies to make payments to small business prime contractors within 15 days of sending an invoice.

Read Chair Chabot’s statement here.

National Small Business Week Virtual Conference

SBA has partnered with the SCORE Association to offer a NSBW Virtual Conference which will take place May 1- May 3, between 12:30pm ET and 6:30pm ET each day. The conference will offer 12 educational webinars, mentoring sessions, networking opportunities and resources in a three-day event. You will hear from industry experts, such as Visa, Google, Chase, Constant Contact, Square and more. They will share insider tips on various aspects of online marketing, financing, customer service, cybersecurity among other topics.

Register for the NSBW Virtual Conference here.

SBA Office of Advocacy to Host a Regulatory Reform Roundtable and a NAFTA Outreach Meeting in Atlanta

Next week, the SBA Office of Advocacy will be hosting a Regulatory Reform Roundtable and a NAFTA Modernization Outreach meeting for small business owners in order to gain insight into which specific federal regulatory burdens present the biggest barriers to small business growth and get input on possible NAFTA changes.

Meeting will be held:

  • Tuesday, April 10, 2018: Regulatory Reform Roundtable at 8:30am with a special focus on environmental regulatory issues at 2pm
    • Location: GTRI Conference Center, 205 14th Street, NW, Atlanta, GA
  • Wednesday, April 11, 2018: NAFTA Modernization Outreach meeting at 9:00 a.m. for small business owners.
    • Location: Georgia Department of Economic Development, 75 5th Street Northwest, 10th floor, Atlanta, GA.

To register for these meetings, visit SBA’s website.

National Women’s Business Council Releases Reports on Crowdfunding

The National Women’s Business Council released two new research reports on success factors for women business owners access to small business finance, finding that the first 30 days of crowdfunding campaigns matter the most and personal stories play a vital role in reaching fundraising goals. The reports also showed that while it helps to have large network, the way you leverage that network to help you with funding your business is equally important to your success at raising money.

Read the press release and access the reports here.

WIPP Works in Washington: A Heavy Buying Season Ahead – Five Tips for Being Successful in the Federal Marketplace

For all women business owners who have secured, or are seeking federal contracts, the first order of business is remembering the incredible effort it took to get the Women-Owned Small Business Procurement Program in place. WIPP and thousands of women across the country pushed for this program and as a result, today women are awarded

Anne Sullivan

Anne Sullivan, WIPP Chief Advocate

nearly $18 billion in contracts through the program. As part of that 13-year effort, I have had the privilege to gain insights on successful strategies.

Last month, the Department of Treasury held a women’s history month event organized by Lisa Jenkins, who heads the small business office and is an incredible advocate for women-owned businesses. I thought I would share my five tips for being successful in the federal marketplace I presented at the event. PS: If you do not know Lisa Jenkins, make it your business to do so.

Since the federal government just received its FY18 money, expect spending to be fast and furious until the end of the fiscal year—September 30. Think about the strategies you have in place to respond to a myriad of requests for information and Sources Sought notices. Remember to ask agencies to consider setting aside the contract for women-owned companies and familiarize yourself with the WOSB sole source rules.

FIVE TIPS

  1. Know more than the person you are meeting with.

Dig deep—read the Small Business part of the FAR (https://www.acquisition.gov/far/html/FARTOCP19.html) and all the government contracting articles/news. you can get your hands on. Look up WIPP’s Give Me Five http://www.giveme5.com program and take classes that are applicable to building your knowledge base. Look up the agency’s FY18 funding and understand their focus (Give Me Five: Follow the Money Webinar).

  1. Seek to establish relationships in unconventional ways—go to events where the person you are trying to meet is speaking and get creative about getting an introduction to them through your networks. Follow them on social media. Only ask for meetings when you have all your ducks in a row and you have a specific ask.
  2. Join organizations that work with agencies and become a leader. It is not enough to join an organization at the lowest level. The real benefit comes from being a leader. Organizations feature their leaders, give them opportunities to introduce speakers and assist their leaders in connections that are helpful in the federal contracting arena.
  3. Learn how to use the SBA set-aside programs, such as the WOSB procurement program and be prepared to educate agency contracting officers on the benefits of using the program. Don’t be offended that contracting officers don’t know your program—you can be the educator. That’s a good place to be.

Understand the budget process—it’s all public information. Know how your programs are funded. Look up the agency’s funding and understand their focus (Check out Give Me Five: Follow the Money Webinar). Although this can be complicated, understanding this process and using it to your advantage will give you a huge leg up on the competition.

National Small Business Week is Coming!

Spring is upon us and with spring comes … National Small Business Week!

SBA Administrator Linda McMahon announced that this year’s National Small Business Week will be held from April 29-May 5. Every year since 1963, the country spends a week recognizing the critical contributions of our small business owners. More than half of Americans either own or work for a small business, and small businesses create about two out of every three new jobs each year. And, of course, women business owners are a significant part of that small business story—growing at a rate four times faster than their male counterparts!

This year’s events kick off in Washington, D.C., where the administrator will recognize and award outstanding small business owners and resource partners from around the country. It will continue with a bus road show stopping in various cities, where Administrator McMahon and SBA staff will meet with small business owners and hold roundtable discussions. Read more here.

Speaking of small business owners who really contribute, we want to give you the opportunity to get to know WIPP’s board better. This month, we’re featuring Board Vice Chair Angela Dingle, owner of Ex Nihilo Management. Read on for a short Q&A with Angela

Q. Why did you join Women Impacting Public Policy?

Angela Dingle

Angela Dingle, WIPP Vice Board Chair

A. I joined WIPP because I was and continue to be impressed with its non-partisan approach to advocacy. The issues that are being discussed on Capitol Hill are important to me as a woman business owner and membership in WIPP means I have a seat at the policy table during the discussions. Someone once said to me, “get into politics or get out of business.” Well, I jumped in with both feet and haven’t let up yet.

Q. What about WIPP is most beneficial for your business?

A. Thanks to my WIPP membership, I’ve testified before policymakers, received help navigating federal contracting and benefitted from networking opportunities and media exposure. Being a part of WIPP makes me feel connected to issues affecting women entrepreneurs and women in the workforce.

WIPP Works in Washington: The Complicated Business of Changing Investment Behavior

I don’t know if you watch the Oscars, or like me, go to a party having barely seen any of the movies. I am usually pretty bored with the thank-you speeches from the winners, but this year one acceptance speech got my attention. It was the speech from the winner of

Anne Sullivan

Ann Sullivan, WIPP Chief Advocate

Best Actress, Frances McDormand, for her role in “Three Billboards Outside Ebbing, Missouri.” Referencing women in the audience who “had stories to tell and projects to finance,” she said, “don’t talk to us at the parties tonight, invite us to your office in a couple of days…and we’ll tell you all about them.” She asked the women to stand and told Meryl Streep, “if you do it they’ll all do it.”

The speech caught my attention because women entrepreneurs in all industries including Hollywood share the same vexing problem—access to capital. A damning statistic, women only receive 4% of all commercial loan dollars and 2% of venture capital, shows women entrepreneurs struggle with obtaining adequate capital. Yet, over 36% of businesses are women-owned and are growing at four times the rate of businesses owned by men, so it appears there is no shortage of women seeking operating or investment capital.

Asked why women get so little VC money in Fortune article, Julie Wainwright, founder and CEO of a consignment website The RealReal, thinks it comes down to the lack of female VCs. “When you have different businesses that aren’t proven that may appeal more to a female [customer], a female investor is going to be able to evaluate that” better than a male investor could, she says. “I think in general, most VCs are trying to do their jobs, but there are a lot of unconscious biases.”

A study from Harvard Business Review also points to an additional reason for this deficit—male and female entrepreneurs are asked different questions by VCs, which in turn affects the level of funding they receive. According to the study, when investors asked male entrepreneurs questions they used a promotion orientation, meaning they focused on their hopes and achievements. Alternatively, when questioning women entrepreneurs, they mostly used a prevention orientation, which focused on questions regarding responsibility, security and vigilance. Researchers found that this has a substantial impact on funding outcomes, thus helping to explain the large disparity in VC funding for women entrepreneurs.

Given these barriers, why are so many women starting businesses? It seems to boil down to two reasons: they were either inspired or frustrated. Inspired because they had a good idea, built a better “mousetrap” or decided to create wealth for their families by taking the risk of entrepreneurship. Frustrated because they weren’t getting equal pay for equal work, were tired of a hostile work environment or saw no ability to advance.

A case study by the National Women’s Business Council highlights both of these. The study examined reasons why women become necessity entrepreneurs and of the nine women interviewed, eight cited gender-specific issues, thus making entrepreneurship a necessity. The study also highlights the financial need as the driver to start businesses. “I can relate to many of these women because I’m a prime example of a necessity entrepreneur,” said Kari Warberg Block, NWBC council member and founder and CEO of EarthKind®. “I was fresh out of alternatives with no job options, and I had to do something, anything, to take care of my family. I had an idea to create a safe, natural option for pest control, and 10 years later that has turned into a $20 million-dollar business.”

What are some of the solutions to this vexing problem? Unfortunately, there is no silver bullet but rather a host of solutions necessary to turn this tide. For starters, investors and lenders can start asking the right questions and including women in their review process. Women who sit on the boards of these companies can monitor lending/investing in women-owned companies. And on the policy front, WIPP’s Economic Blueprint suggests a host of policy changes that will help.  They include understanding the data from lending institutions with respect to lending to women, freeing up a regulatory environment that discourages smaller banks from lending to small businesses and developing a track for women to become investors through government backed programs like the Small Business Investment Companies. Lastly, Congress should require a comprehensive review of the Small Business Innovation Research program, which awards only 16% to women.

Even though access to capital for women business owners requires changing cultural biases and policies, all of us can start by educating those around us. If one of us stands up, everyone will stand.

SBA: Tell us Which Regulations Bother You

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The SBA Office of Advocacy is continuing to host small business roundtables to hear firsthand from small businesses how they are facing regulatory burdens. WIPP encourages you to consider which regulations are problematic for your business and share them with the Office of Advocacy. The best way to do that is to attend one of their meetings!

Roundtables:

Detroit, MI – March 13 – Register HERE

Milwaukee, WI – March 16 – Register HERE

San Antonio, TX – March 19 – Register HERE

Houston, TX – March 20 – Register HERE

Philadelphia, PA – March 22 – Register HERE

Atlanta, GA – April 10 – Register HERE

March Policy Update

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Policy Upate Graphic.pngSCOTUS Punts on DACA (For Now)

Last week, the Supreme Court sent the Trump Administration’s appeal on the President’s order to cancel DACA back to the 9th Circuit Court of Appeals, leaving the program’s March 5 expiration moot. Dreamers will remain protected from deportation until the Court of Appeals renders a decision, which could take months.

Breaking the Bank: WIPP Weighs in on Access to Capital

The Senate continues working through amendments to bipartisan lending legislation today that would lighten regulations imposed on small and mid-sized banks through Dodd-Frank. WIPP has advocated for ending the “one-size-fits-all” approach by calling on Congress to enact legislation to address the regulatory relief needed for smaller lending institutions, thus freeing up capital for small businesses.

Read the Economic Growth, Regulatory Relief, and Consumer Protection Act here. Read WIPP’s Breaking the Bank platform here.

WIPP Urges Expansion of Association Health Plans

In January, the Department of Labor issued a proposed rule that would expand participation in Association Health Plans for small businesses and the self-employed. WIPP urged the department to implement a program that maximizes the number of businesses that can participate in the plans, so that women business owners can provide more choices for affordable health insurance.

Read WIPP’s comments here.

NLRB Reverses Joint Employer Standard

Obama’s legal standard for determining whether joint employers could be held liable for an intertwined business’s workplace issues is back due to a conflict of interest of a board member who did not recuse himself from the case. NLRB granted the parties in the original case the ability to appeal and could rehear the case later this year.

Read the NLRB’s press release here.

Tax Withholding Guidance Released

Taxes 2.jpegThe IRS recently released a notice providing the 2018 income tax withholding tables, showing the new rates for employees. The tables reflect changes made by the tax bill that was signed into law last month, including the increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. They are designed to work with the Forms W-4 that employees have already filed with their employers.
The IRS is directing employers to implement the new withholding tables as soon as possible, but no later than February 15, 2018. This guidance is the first of several items that the agency plans to release this year in order to simplify the transition of the new rules.
For the IRS’s FAQ on the Tax Withholding Timetables, click here.

Proposed Rule Issued to Expand AHPs

Healthcare.jpgIn October, the Trump Administration issued an Executive Order directing the Department of Labor to expand access to Association Health Plans (AHPs).
On January 5, a proposed rule was published that would expand participation in AHPs for small employers and the self-employed. Specifically, the proposed rule would:
  • Treat AHPs as large employers (flexibility on pricing and products)
  • Relax the requirement that associations must exist for a reason other than offering health plans
  • Relax definition of “commonality of interest” as:
  • 1) Being in the same trade, industry or profession; or
  • 2) Being in the same principal place of business within the same state or common metropolitan area (even if the metro area extends across state lines) to make it easier for employers to group together
The proposed rule would also adopt non-discrimination protections that bar all health group plans from conditioning eligibility, benefits or premiums on health status.
The deadline to submit comments to the Employee Benefits Security Administration within the Department of Labor is March 6. Comments can be submitted here.

Need For 7(a) Lending Addressed in CR

WIPP and SBALinda 2.jpgAdministered by the Small Business Administration, the 7(a) loan program is a loan guarantee program designed to encourage lenders to provide loans to small businesses that might not be able to otherwise obtain financing. During the first half of FY17, the 7(a) loan program saw an increased demand with approvals 9% higher than in the first half FY16. This lead Congress to include an appropriations provision to increase the program’s authorization limit to $27.5 billion for FY17 from $26.5 billion in FY16.

The just passed continuing resolution to fund the government included a provision on the program. It authorized SBA to use more funding so they could administer the 7(a) program with increased demand.