WASHINGTON, D.C. (Aug. 12, 2020) — Sixty-three small business groups joined today urging members of the United States Senate and United States House of Representatives to exclude during conference discussions on the Fiscal Year 2021 National Defense Authorization Act non-germane provisions that would levy costly new beneficial ownership reporting requirements on already hurting small businesses.
The legislation treats small business owners as criminals by threatening them with jail time and oppressive fines for paperwork violations, and, worse, puts the personal information of small business owners at serious risk. The NFIB-led coalition made their case clear through a letter to Capitol Hill urging members of the conference committee to exclude this non-germane amendment during its discussions.
“Small businesses are already struggling to recover during this unprecedented public health crisis. Now is not the time to kick small businesses while they are down,” said Kevin Kuhlman, NFIB’s Vice President of Federal Government Relations. “We join today with 62 other small business groups to urge the conference committee to exclude this non-germane provision, which would not only burden small business owners with a significant regulatory cost at a time when they are trying to survive but also puts their personal and sometimes confidential information at serious risk by creating a database searchable without a judicial subpoena or warrant.”
The House passed H.R. 6395, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, which contained an amendment offered by Representative Carolyn Maloney that incorporated the text of H.R. 2513, the Corporate Transparency Act of 2019. NFIB considered this vote to be an NFIB Key Vote for the 116th Congress.
The Corporate Transparency Act of 2019 would require small corporations and limited liability companies with 20 or fewer employees to complete and submit annual paperwork which includes the personally identifiable information of each business owner to the Treasury Department’s Financial Crimes Enforcement Network upon the creation of the business and annually for the life of the business. Failure to comply is a federal crime with civil penalties up to $10,000 and criminal penalties of up to three years in prison.
More than 4.9 million businesses would be required to provide personal ownership information to FinCEN on an annual basis. The Treasury Department would be required to retain the information for the life of the business plus five years. Furthermore, the legislation grants broad access to the information to federal, state, local, or tribal law enforcement agencies without a judicial subpoena or warrant, as current law requires.
An NFIB study found that, under the Corporate Transparency Act of 2019, small businesses would face $5.7 billion in new regulatory costs and an additional 131.7 million hours of paperwork if the legislation is signed into law.
To read more on NFIB’s efforts to protect small business privacy, visit https://nfib.com/protectprivacy.