State Director Matt Everson explains how small businesses would suffer under proposed legislation
A bill in the Senate would place regulatory burdens on small business owners and could even threaten their privacy. The True Incorporation Transparency for Law Enforcement, or the TITLE Act, was introduced in the Senate this summer. State Director Matt Everson wrote an Opinion column in the Des Moines Register that explains how small businesses would be negatively impacted by this proposed legislation.
Despite warnings by some of an impending recession, Iowa’s small businesses are still thriving. It’s a fact I’d like to remind members of the U.S. Senate as they consider legislation that would treat hard-working small business owners like criminals. The bill that would subject small businesses owners across Iowa to a new level of over-regulation.
Supposedly, the so-called True Incorporation Transparency for Law Enforcement (TITLE) Act is designed to help fight crime. In reality, however, it throws up a costly and intrusive new obstacles for small business owners, who employ 48% of Iowans and are the most responsible for job growth in the state.
Iowa is a good place to run a small business because of a reasonably low amount of red tape compared with other states. Keeping that red tape to a minimum is crucial. The small business owners who make up our organization, the National Federation of Independent Business, see federal paperwork as a major challenge, and rank unreasonable government regulations second only to high taxes as their biggest problem. Over 80% of NFIB members oppose this kind of over-regulation.
The TITLE Act would require firms with 20 or fewer employees to regularly file a list of everyone with an ownership stake in their business with the state, including highly detailed personal information. A new study from NFIB puts real numbers on the bill’s burden: It would cost small business owners $5.7 billion in new regulatory costs and an extra 131.7 million hours of paperwork every year.
Amazingly, larger businesses and big corporations, which have resources like lawyers and compliance officers to deal with burdensome regulations, are exempt from these new and costly regulations. Mom ‘n’ pop shops usually don’t, and the penalty for a simple paperwork slip-up could put them out of business. The penalties that come with this bill are astronomical: up to three years in prison and up to $1 million dollars in fines. I can’t think of one small business owner in Iowa who could shoulder that burden.
The bill also exposes personal information that could lead to privacy violations. That’s because the Financial Crimes Enforcement Network (FinCEN) and the Treasury Department could access that personal information without a warrant or a subpoena and use it however they see fit. Government officials with an agenda could harass and intimidate small business owners, or it could fall into the hands of identity thieves. Hardly a week goes by without another story of a federal database getting hacked. Also worrisome is that the bill allows states to post any or all of that personal information for anyone to see.
Iowa’s small business community isn’t known as a hotbed of organized crime, and the government already has the tools it needs to investigate businesses it suspects. This is a classic case of legislation that looks good until you take a closer look. The Senate wants to get tough on crime. However, with the TITLE Act, they’re just being tough on job creators. Iowa’s small businesses deserve better, which is why our congressional delegation should oppose this bill.