06/13/2007
In most states, the 2007 legislative session was a mix of bills both helpful and harmful to small business. NFIB worked alongside lawmakers to ensure legislation passed would take into consideration the impact on the country's No. 1 job creators, and while we saw many victories, there is much left to be done next session as well.
As legislative sessions around the country come to an end, NFIB looks back on some of the best--and worst--small-business bills passed in the state houses.
Health care
Alabama
Though the Alabama Senate spent most of its session in gridlock, it did manage to defeat several pieces of legislation that would have been harmful to small businesses. Some important bills that were rejected include health-care mandates for in vitro fertilization, prostate cancer and coverage for all types of diabetes.
Arizona
Small-business owners applauded the passage of a bill that establishes a working committee to develop and implement a uniform health-insurance application form by Jan. 1, 2009. This bill will help simplify the process and eliminate mounds of paperwork by requiring health-insurance carriers to use the same initial application form, allowing small-business owners to apply for insurance with multiple carriers at one time and compare costs with the quotes obtained.
Iowa
Small-Business Health Plan legislation passed by the Iowa General Assembly was a significant step toward allowing associations to pool members when shopping for health-care insurance. HF 790, which was signed into law by the governor, created a new class of "association member" within the small-group market, allowing for health-insurance plans that cover all association members and their families, rather than just a single business.
Iowa small businesses also applauded the defeat of HF 96, a health-insurance insurance mandate that would have required employers to provide unlimited benefits for mental illness.
Missouri
NFIB/Missouri supported pro-small-business legislation introduced by state Rep. Doug Irvin designed to help Missouri businesses control health-care costs while giving workers the flexibility in choosing the plan that best fits their needs. The bill passed, and was signed into law June 2.
New Mexico
The legislature defeated H.B. 335, the so-called Fair Share Health Care Act, that would have required larger employers to provide detailed health-care coverage information on their employees. Though the bill was aimed at large businesses, mandatory requirements are dangerous, and small business feared passage of the legislation would lead to other bills designed to require the same of them.
H.B. 1222 and S.B. 720, the so-called Health Security Act, also were defeated in New Mexico. These bills would have incorporated elements of a single-payer health-care system similar to that in Canada.
Vermont
In Vermont, S. 39 imposed an additional health-insurance mandate requiring all policies to reimburse for naturopathic physician services. The legislation was enacted without Gov. Douglas' signature, and will take effect Oct. 1, 2007. It will apply to all health-care plans by Oct. 1, 2008.
Taxes
Alabama
The Alabama Legislature was successful in defeating the repeal of the federal income tax deduction, saving taxpayers--small-business owners included--millions of dollars per year.
Idaho
NFIB/Idaho played a critical role in defeating a bill that would have allowed for a local-option sales tax, which Idaho small businesses have consistently opposed.
Illinois
NFIB/Illinois was actively involved this session in fighting the governor's proposed gross receipts tax to fund a health-care plan. While the House unanimously voted against the GRT proposal, the legislature is working overtime to pass a state budget, and the governor continues to seek revenue to finance his universal health-care proposal, including a 3 percent payroll tax on businesses.
Kansas
NFIB/Kansas members have long supported the elimination of the franchise tax, and this session the legislature approved a plan to phase out this tax over the next five years. The legislature also approved a proposal to draw from the more than $650 million in the state's unemployment insurance fund and give much-needed tax relief to the state's positive-balanced employers.
Minnesota
Gov. Tim Pawlenty stood strong for small business this session, vetoing 12 bills and making an additional 33 line-item vetoes that will save taxpayers close to $5.9 billion in new taxes over a four-year period. The governor also vetoed an income-tax hike that would have created a new 9 percent income-tax rate, which would have affected many small-business owners in Minnesota.
Nebraska
This Nebraska legislative session proved to be business-friendly overall, passing a number of bills supported by small business--including one of the largest tax-relief packages in state history of nearly $425 million in tax reductions over the next two years. Additionally, revisions were made to the level of inheritance tax exemptions and rates.
South Dakota
NFIB/South Dakota was pleased to see that H.B. 216, which called for a county gross receipts tax on meals, lodging and alcoholic beverages, was defeated in committee. More than 75 percent of the NFIB/South Dakota members who responded to a recent ballot were opposed to the GRT.
Utah
This year's huge budget surplus yielded multiple means for tax relief and cuts--from directed exemptions to a general overhaul of the income-tax system, more than 20 bills were introduced. In the end, all of the substantive changes were collected together in a summary-tax bill, sponsored by Sen. Niederhauser. The stipulations that specifically became law include:
- The food and ingredient sales tax was cut in half
- Base sales and use tax rate was reduced from 4.75 percent to 4.65 percent
- The state additional portion of the general sales tax was repealed to one quarter
- Portions of county and municipal sales tax were also repealed back down to a quarter each
- The dual-income tax system is to be replaced by a base 5 percent (previously 5.35 percent) state tax, the Single Rate Individual Income Tax Act, which retains specific secondary exemptions
- Modified the applicable taxes for "research activities"
- Reenacted the Renewable Energy Tax Credit
- Added new tax exemptions for mining and basic materials
- Increased the maximum limit for resort community tax
Wyoming
One House bill increasing the gas tax was defeated this session, and the sales tax on food was repealed permanently with another.
Minimum Wage
Alaska
With the support of NFIB/Alaska, attempts were defeated to increase the state's minimum wage to at least $8, adjusted to inflation or $1 more than the proposed federal minimum wage, whichever is greater.
Iowa
Though the Iowa General Assembly raised the minimum wage this year from $5.15 to $7.25, amendments that called for the elimination of the 90-day training wage for employees and annual cost-of-living adjustments were defeated.
Nebraska
Late in the 2007 legislative session, amendments to the state minimum wage were adopted to bring Nebraska's law into conformity with the recently enacted revisions to the federal minimum wage. Amendments will increase the state minimum wage to $5.85 per hour July 24, 2007; to $6.55 per hour July 24, 2008; and to $7.25 per hour on or after July 24, 2009.
South Carolina
A state-mandated minimum-wage bill was defeated in the House Ways and Means Committee.
Texas
Texas business owners were again threatened with an increase in the state minimum wage, with seven bills filed that would have made the state wage for all employers more than $7 per hour. H.B. 49, which made it out of committee, would have increased the minimum wage to $7.25 per hour. But NFIB/Texas stepped up its efforts and killed the bill in the House Calendars Committee, where it was never scheduled for floor debate.
Vermont
Though opposed by NFIB/Vermont, a new law will require wage increases for tipped employees to be equivalent to increases in the regular minimum wage. Effective Jan. 1, any employees earning less than $120 month in tips will be paid $7.53 per hour.
Workers' compensation
Arizona
A new law that restores insurance carriers' abilities to offer premium discounts on workers' compensation policies for businesses with drug and alcohol programs in the workplace takes effect.
Colorado
The governor signed into law a bill allowing for an employee's right to change treatment providers under a workers' comp claim. NFIB/Colorado worked with the bill's sponsor prior to introduction to draft language allowing the change for the employee while making sure the employer had control of the process. Additionally, legislation was successfully amended concerning sole proprietors and partners to waive workers' comp coverage while working on a construction site.
Nebraska
Workers' compensation reform legislation adopted this session is expected to significantly reduce hospital reimbursement levels and ultimately lead to reduced premiums for workers' compensation coverage.
South Carolina
A conference committee last week agreed on a workers' comp reform bill that is good for small business, and a vote by both chambers is expected on the bill next week. NFIB has had a significant role in this debate through strong lobbying, grassroots and media presence, and by working closely with a resolute coalition.
Washington
NFIB/Washington helped in the defeat of a bill that would have increased workers' comp costs by $67 million by removing checks and balances within the independent medical examination process, where claims are closed with an objective evaluation.
What to look for in the next session
As your state's next legislative session approaches, NFIB is keeping an eye out for legislation that will have an impact on small business. NFIB/Alabama will work toward the passage of a bill designed to provide tax relief for small-business owners offering health insurance, and NFIB/South Carolina looks forward to the passage of a group cooperative bill. And as card-check legislation is debated in Vermont and a gross-receipt tax looks for passage in Texas, NFIB will lead the fight against these bills that only serve to harm small business.
What you can do
While your lawmakers are home on recess, contact them and let them know your experiences as a small-business owner. Thank those who have helped for their support, and remind them to keep small business in mind when casting their votes next session.
