Omnibus Spending Bill ApprovedDecember 16, 2015
Late last week, Congress approved a $1.1. trillion government spending bill negotiated by House Speaker Paul Ryan (R-Wis.), Minority Leader Nancy Pelosi (D-Calif.), as well as their Senate counterparts Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry Reid (D-Nev.). Included in the legislation were a handful of tax provisions, specifically, a proposal to delay by two years the Affordable Care Act’s “Cadillac tax” on costly health benefits, and a one-year delay on the tax on health insurance companies, also known as the HIT.
Throughout last week – while facing a looming, potential government shutdown – there were ongoing negotiations over several policy riders related to environmental and healthcare disputes that Republican lawmakers wanted to attach to the must-pass spending bill; the White House has opposed these amendments. Victories were made for both sides, and some of the most controversial issues were addressed in the spending bill.
They agreed to lift the prohibition on exporting U.S. oil, but backed down on Republican driven efforts to tighten restrictions on Syrian and Iraqi refugees. The Republicans also did not mount a serious effort to remove funding from Planned Parenthood, but Republicans, however, succeeded in including language to reform the so-called Visa Waiver Program, which allows many foreign citizens visa-free travel in the U.S. for three months. President Barack Obama has voiced support for that plan.
In addition to unrestricted oil exports, the spending deal is also set to include a five-year extension of the production tax credit for wind energy with a phase-out to 40 percent by 2019, as well as a five-year ratcheting down of the investment tax credit and the “commence construction” eligibility. The Land and Water Conservation Fund would see a three-year restoration following its expiration in September.
Additionally, the bill extends the ban on Internet access tax until the beginning of October 2016 and has language restricting the Commerce Department’s ability to fund and move forward with its plan to step back from its oversight role of the Internet’s domain name system. The measure also included intelligence-related provisions, like one that would have the Director of National Intelligence report to Congress when companies decide to keep call records for less than 18 months.
The spending bill included several provisions of particular interest to small business, including:
- Cybersecurity Legislation – Language based primarily on the Senate’s Cybersecurity Information Sharing Act (S.754) which would incentivize the private sector to share information about cyberthreats with the federal government while providing them with liability protections for not acting on information received. this provision includes an amendment from Small Business and Entrepreneurship Committee Ranking Member Jeanne Shaheen (D-N.H.) which directs the Department of Homeland Security (DHS), in consultation with the U.S. Small Business Administration (SBA), to provide ongoing outreach and best practices to the small-businesses community to ensure that entrepreneurs have the tools and resources to protect their cybersecurity infrastructure.
- CREED ACT – The Commercial Real Estate and Economic Development (CREED) Act (S. 966 / H.R. 2266) was also included in the omnibus bill which will help small businesses expand their access to capital by extending the SBA’s 504 Loan Refinancing Program. Currently, the 504 program may only be used by small businesses to buy equipment or to purchase or improve real estate. The CREED Act expands the use of the 504 program to now allow commercial real estate refinancing. The program operates at virtually no cost to the federal government, and under this legislation would remain in place until that changes.
- Small Business Investment Company Capital Act of 2015 (H.R. 1023 & S. 552) – The Small Business Investment Company Capital Act of 2015 amends the Small Business Investment Act of 1958 to increase from $225 million to $350 million the maximum amount of outstanding leverage which can be made available by the SBA to two or more commonly controlled Small Business Investment Companies (SBIC) not under capital impairment and have consistently been successful. This cap was restricting the ability of small-business investors from accessing SBIC’s and ultimately making it more difficult for small businesses to obtain the capital necessary to grow and create jobs.
- The State Trade and Export Promotion (STEP) Program – STEP received a funding increase for next year, $600,000 above its current $18 million, which is a great success, especially since the program is not fully authorized. Conferees are close to finalizing the Trade Facilitation and Trade Enforcement Act, which reauthorizes STEP through 2020 and includes State-Federal trade coordination language.
The spending bill was ultimately packaged with an NSBA-supported tax extenders bill which makes several major small-business tax credits and deductions permanent.
NSBA supports provisions to ease the impact of the Cadillac tax and the HIT – both of which stand to greatly increase small-business health insurance costs, and applauds the inclusion of key small-business provisions into the overall spending bill.