Key Legislative and Regulatory Issues
Updated April 2012
INTRODUCTION
For those of you who just beamed down to earth from another solar system, it is election time here in the USA! As Sherlock Holmes would say "the game is afoot". For those of us here in your Nation's Capital who live and breathe politics, it is the best of times. For the rest of the country, it is a nuisance. The real game here in Washington right now is to handicap who will be the vice presidential candidate for the Republican presidential ticket. This year is especially important. All 435 House seats are up for grabs as is one-third of the Senate and most importantly the President is seeking re-election. The House elections are compounded by redistricting which has forced many incumbents to retire or face off against another incumbent. The Senate has also seen many members opting for retirement, mainly due to the gridlock that has caused so much frustration and lack of action on key legislation to address the spiraling deficit and the economy. However, generally, during an election year, very little gets done legislatively anyway. There will be lots of hearings, rhetoric and finger pointing but little will actually be accomplished...
The Presidential campaign will dominate the election cycle and will define each Party's messages and issues. To be sure, that has already begun. Taxes, spending and the economy will be front and center in this debate. However, while both Presidential candidates agree on the issues, they strongly disagree on how to address these problems. The House and Senate candidates will have to deal with this situation as best they can. For NFDA, this election is an opportunity to support candidates who support funeral service and small business. In that regard, the NFDA PAC really needs the support of all our members. I would urge all NFDA members to consider supporting NFDA PAC's efforts to help pro-funeral service candidates.
However, in the midst of all the election year political discussions on how to save the economy and reduce the massive federal deficit, NFDA continues to advocate for issues that benefit funeral service.
For more information about any of these issues, contact NFDA's Advocacy Division staff:
John Fitch, senior vice president, Advocacy Division, 202-547-0441, jfitch@nfda.org
Lesley Witter, director of political affairs, 202-547-0877, lwitter@nfda.org
- Legislative Issues
- Codification of SSI Irrevocable Funeral/Burial Trust Exclusion. (H.R. 1476/S.2150)
- Indigent Funeral Expense Reimbursement Act of 2011 (H.R. 1033)
- Estate Tax (H.R. 1259 and H.R. 1757)
- Subchapter S Modernization Act of 2011 (H.R. 1478)
- Veterans Missing in America Act of 2011 (H.R. 2051/S. 2244)
- Small Business Health Relief Act of 2011 (S.1049/H.R. 1370)
- Small Business Regulatory Freedom Act of 2011 (S. 1030)
- Regulatory Accountability Act of 2011 (H.R. 3010/S.1606)
- Work Opportunity Tax Credit for Small Business (H.R. 1663)
- Restore Mainstream Credit's Act of 2012 (H.R. 4293)
- Regulatory Issues
- Formaldehyde
- Gluteraldehyde
Codification of SSI Irrevocable Funeral/Burial Trust Exemption (H.R. 935/S. 863). NFDA is working closely with our House and Senate sponsors to implement a strategy to get this bill passed into law this year. Rep. Steve Southerland (R-FL), the primary sponsor of the bill, is really working hard to help us secure more co-sponsors and get this bill passed in the House. Likewise, Senator Snowe (R-ME), our primary Senate sponsor, and several co-sponsors are working to get our bill passed in the Senate. This year, we are trying a new strategy. Instead of seeking to attach our bills to a larger SSA or SSI bill, we are seeking to move it directly to the House and Senate floor under a Unanimous Consent process. However, we have run into a couple of temporary roadblocks. In the Senate, Senator Coburn (R-OK), known to his colleagues as "Dr. No," has placed a hold on our bill which we are trying to convince him to release and let our bill go to the floor for a quick voice vote. Our Senate Sponsor Sen. Snowe (R-ME) is working with us on this problem. In the House, the Chairman of the Human Resources Subcommittee of the Ways and Means Committee has told us that he believes a limit on the amount of these irrevocable funeral/burial trusts should be considered before he agrees to let it go to the House floor. We are working with him and our sponsor NFDA member Rep. Southerland (R-FL) to seek a solution to his concern so we can get our bill to the floor via the Consent Calendar. As you can see, nothing is easy here in Washington.
Take Action: Passage of these bills continues to be a high priority for NFDA. Send an e-mail to your members of Congress via Congress-at-a-Click, urging them to co-sponsor and actively support passage of H.R. 1476 and S. 2150.
Indigent Funeral Expense Reimbursement Act of 2011 (H.R. 1033). Again this year, Rep. Broun (R-GA) has introduced legislation, at NFDA's request, to provide an above the line tax credit to funeral homes for unreimbursed expenses for providing funeral and/or burial services and merchandise for indigents. The term indigent is defined by state law and the credit is capped at $3,000 per year. With state and local funding for these services being reduced or eliminated, NFDA is seeking legislative tax relief for funeral homes who voluntarily provide these services to their communities generally at the request of state or local officials. In addition, NFDA is working with several Senate offices to have a Senate version of H.R. 1033 introduced as well.
Estate Tax (H.R. 1259 and H.R. 1757). NFDA and other members of the Family Business Estate Tax Coalition have begun efforts to advocate that Congress make permanent the current estate tax law that expires at the end of 2012. At that time, the estate tax will revert back to the 2001 levels of a $1 million ($2 million per couple) exclusion and a 55percent rate. The exclusion is not indexed for inflation. The current law sets the exclusion at $5 million ($10 million for a couple) and a tax rate for amounts above that of 35 percent. This exclusion is indexed for inflation and a stepped-up basis is included as well. While this issue has not matured yet politically, two bills have been introduced in the House to begin the debate. H.R. 1259 introduced by Rep. Brady (R-TX) would fully repeal the estate tax effective January 1, 2013. H.R. 1757, introduced by Rep. Berkley (D-NV) would make permanent the current exclusion and rate. While NFDA and the Family Business Estate Tax Coalition support full repeal of the estate tax, the political reality is that at best we get Congress to support making permanent the current estate tax law. It is clear that the issue will not be dealt with until after the election in a 'Lame Duck' Session. However, NFDA, in coalition with other associations, has begun active lobbying on this issue urging Congress to support making permanent the current law.
Subchapter S Modernization Act of 2011 (H.R. 1478). Ways & Means Committee members Dave Reichert (R-WA) and Ron Kind (D-WI) introduced the S Corporation Modernization Act of 2011. The legislation is a critical measure to modernize the outdated rules that apply to S corporations. The Reichert-Kind legislation would make it easier for S corporations to raise capital, invest in new buildings and equipment and hire new workers. Among other items, the bill would permanently reduce the built-in gains holding period to five years allowing access to S corporations' own locked-up capital, allow non-resident aliens to invest in S corporations through small business trusts, reduce the negative impact of the so-called sting tax, and encourage charitable giving by S corporations by simplifying related rules. A recent study authored by Drs. Robert Carroll and Gerald Prante of Ernst & Young LLP finds that 54 percent of all private sector employees (69 million) work for pass-through businesses, and one out of four private sector workers (31 million) is employed by an S corporation. The study also finds that the existence of flow-through businesses-S corporations, partnerships, limited liability companies, and sole proprietorships-results in higher levels of capital investment and employment than if all firms were structured as C corporations.
Since many NFDA members use the Subchapter S form of organization, NFDA is actively advocating for passage of H.R. 1478.
Veterans Missing in America Act of 2011 (H.R. 2051). Introduced by Representatives Tiberi (R-OH) and Stivers (R-OH) in the House and Senators Portman (R-OH) and Begich (D-AK) in the Senate, the bill would direct the Secretary of Veterans Affairs to work with veterans service organizations and other groups in assisting funeral homes in possession of unidentified or abandoned remains in determining if the remains are that of a veteran eligible for burial at a national cemetery. If remains are determined to be that of an eligible veteran, there is no next of kin, and there are no available resources to cover burial and funeral expenses, then the Secretary of Veterans Affairs shall cover the cost of burial. In addition, the bill would call on the Secretary of Veterans Affairs to establish a public database of the veterans identified in this project. To date, there are 14 co-sponsors on the bill. Rep. Tiberi's has spoken to the Speaker of the House and the Chairman of the Subcommittee for Disability Assistance and Memorial Affairs of the House Veterans Affairs Committee and all seem very supportive. In that regard, NFDA Executive Board member W. Ashley Cozine testified before the Subcommittee during the NFDA Advocacy Summit in March urging them to pass H.R. 2051. We expect action on the bill in May 2012 when other Veterans bills are considered.
Small Business Health Relief Act of 2011 (S.1049/H.R. 1370). These bills, sponsored by Senator Kyl (R-AZ) and Representatives Boustany (R-LA) and Boren (D-OK) respectively would repeal section 9010 of the Patient Affordability and Protection Care Act which would create a substantial new tax (Health Insurance Tax –HIT) on health insurance companies. This new tax will be passed along to their fully insured market clients who are primarily small business. This would disproportionately impact funeral homes and other businesses that do not self-insure. NFDA strongly advocates for access to affordable health insurance for its members. As a member of the HIT Coalition with other small business groups, we strongly support these bills which would repeal this onerous tax which is scheduled to go into effect in 2014.
Small Business Regulatory Freedom Act of 2011 (S. 1030). Introduced by Senator Snowe (R-ME) and others, S. 1030 expands the scope of the Regulatory Flexibility Act (RFA) by forcing government regulators to include the indirect impact of their regulations in their assessments of a regulation's impact on small businesses. The bill also provides small business with expanded judicial review protections, which would help to ensure that small businesses have their views heard during the proposed rule stage of federal rulemaking.
The legislation strengthens several other aspects of the RFA – such as clarifying the standard for periodic review of rules by federal agencies; requiring federal agencies to conduct small business economic analyses before publishing informal guidance documents; and requiring federal agencies to review existing penalty structures for their impact on small businesses within a set timeframe after enactment of new legislation. These important protections are needed to prevent duplicative and outdated regulatory burdens as well as to address penalty structures that may be too high for the small business sector.
Regulatory Accountability Act of 2011 (H.R. 3010/S.1606). The Act would update the federal rulemaking process which has not been changed in over 65 years, during which time agencies have become adept at manipulating the process to serve their agendas. By creating more transparency and participation, and holding agencies accountable for the nature and quality of their data the Act requires better process, but does not compel any particular outcome. For the most costly regulations, agencies (including independent agencies) will be required to lay out in detail the data supporting the action at an earlier stage before the regulation is proposed. The most costly rules will have on-the-record hearings or be subject to requests from interested parties who want to challenge the data on which the agency is relying. Any regulation for which a hearing is held will be subject to more stringent judicial review. The agency will be required to consider the rule's impact on jobs and the economy, as well as the cumulative and indirect impacts of the rule. The agency would also have to show why it didn't select a cheaper alternative (including not writing a rule). The Act requires agencies to justify the need for the rule and show that their proposal is actually the best alternative that will help regulations survive judicial challenges. Agency guidance and use of interim final regulations would be constrained. NFDA strongly supports any legislation that will reduce the onerous regulatory burden on funeral homes.
Work Opportunity Tax Credit for Small Business (H.R. 1663). Amends the Internal Revenue Code to allow certain small businesses with gross receipts in the preceding taxable year not exceeding $20 million a work opportunity tax credit for hiring individuals who have been receiving state unemployment compensation for not less than four weeks in the one-year period ending on the hiring date. Increases the amount of wages eligible for such credit from $6,000 to $12,000 for the hiring of individuals in a high unemployment zone (a county that has an unemployment rate exceeding the greater of four percent or the national unemployment rate). Terminates such credit after December 31, 2013.
Take Action: NFDA strongly supports legislation that provides its members with a tax benefit to improve their service to families.
Restore Mainstream Credit's Act of 2012 (H.R. 4293). This bill would exempt brick and mortar businesses with 20 or fewer full-time employees from having their loans count against the business lending cap placed on credit unions. It requires the National Credit Union Administration to issue guidelines for an appropriate amount of lending to credit worthy businesses, while insures the safety and soundness of those institutions. NFDA, along with other small business groups strongly support this bill.
Tax Reform (no bill yet). NFDA continues to actively monitor the Congressional discussion on how to reform the tax code. Our concern is what impact any reform measure may have on both the marginal and effective tax rates for corporations and individuals. We will immediately act on any proposal that either benefits our members or harms them. We will keep you advised as this process proceeds.
OSHA – New Hazard Communication Standard - On March 26, 2012 OSHA released its Final Rule revising the OSHA Hazard Communication Standard, 1910.1200. It includes portions of the Globally Harmonized System (GHS) that are appropriate to OSHA's regulatory sector, which is workplace safety and health, and retains portions of the existing OSHA Hazard Communication Standard regulating employee exposure to hazardous and toxic chemicals. This revision also includes revisions to substance specific OSHA standards, such as the Formaldehyde Standard, 1910.1048.
By its terms, the Final Rule goes into effect 60 days after this publication date and will specifically pre-empt state laws and regulations covered by its contents. OSHA State Plan states can still adopt their own version of this revised standard, if the state standard is as effective as the Federal standard or more stringent. The Final Rule, including an extremely lengthy Preamble and attached Appendices, encompasses 858 pages, with the actual revision to the OSHA Hazard Communication Standard and related substance specific standards, such as the Formaldehyde Standard, contained in 97 pages.
The effective completion dates, contained in the revised standard are as follows:
1) December 31, 2013. Employers, such as funeral establishments, must train employees on the new label elements contained in the standard and the new format for Safety Data Sheets (SDS). Material safety data sheets are now referred to as Safety Data Sheets for conformity with the GHS. The revised standard changes the format and contents of the presently acceptable material safety data sheets and the new labeling requirements includes pictograms, identifying the hazards of a particular chemical, which are not currently in use on warning labels and which will require education of employees to recognize the new symbols. Examples of the new pictograms and a sample label can be found on OSHA's website, www.osha.gov.
2) June 1, 2015. Chemical manufacturers, importers, distributors and employers must comply with all modified provisions of the revised Hazard Communication Standard except that distributors of chemicals covered by the standard are allowed to ship products, labeled by manufacturers under the old system, until December 1, 2015. Chemical manufacturers are required to review acceptable scientific evidence to determine if a chemical is hazardous, in a physical or health sense, and then develop labels and SDSs per the new requirements of the revised standard. Existing chemicals must be re-evaluated by the manufacturer or distributor, consistent with the new criteria contained in the standard, and must classify the chemical as to the type, degree and severity of the hazard the chemical possesses.
3) June 1, 2016. Employers, such as funeral establishments, are required to update alternative workplace labeling and their written Hazard Communication Program to bring them into full compliance with the revised standard and to provide additional training for newly identified physical or health hazards.
During the transition period, consistent with the aforementioned effective completion dates, manufacturers, distributors and employers can comply either with the newly revised standard or the current standard or both to be in compliance. This does not change, however, the aforementioned required completion dates.
The rationale stated by OSHA for the first required effective completion date of December 1, 2013, whereby employers, such as funeral establishments, would be required to train employees on the new label elements and the Safety Data Sheet format of the revised Standard is that, while full compliance with the Final Rule will begin in 2015, it is possible that American workplaces will begin to receive labels and SDS's that are consistent with the GHS shortly after the publication of the revised Hazard Communication Standard. OSHA feels that it is therefore important to ensure that when employees begin to see the new labels and SDSs in their workplace, they will be familiar with them, understand how to use them and access the information effectively.
NFDA members must complete all training in the new SDS and labeling requirements before the required completion date of December 1, 2013. This is essential since OSHA will, without any doubt, begin making inspections after December 1, 2013, to confirm compliance with the first required completion date. NFDA will be holding workshops, webinars and teleconferences with relevant materials to make sure all NFDA members know how to comply with this new standard.
Gluteraldehyde - California OSHA recently revised the California Department of Industrial Relations PEL and STEL Table to adopt lower permissible exposure limits for several chemicals listed therein. Based on a recent OSHA update, the levels for formaldehyde and gluteraldehyde, both of which are used in funeral service, did not appear to be affected by this revision.
A footnote for gluteraldehyde, however, in the table states: "Gluteraldehyde can cause occupational asthma and skin sensitization responses such as contact dermatitis. Exposure related symptoms may include one or more of the following: shortness of breath, chest tightness, wheeze, cough, skin rash, hives, and irritation of the nose, throat, skin or eyes. Hazard communication training required by sections 5191 or 5194 shall address these health hazards and symptoms along with the measures taken by the employer to evaluate and control exposures that include medical evaluations, exposure monitoring, ventilation systems, work practices, and personal protective equipment.
The communication system required by Section 3203 shall inform employees where to report possible health symptoms and where to ask questions, report concerns, and receive information about the employer's evaluation and control measures. The numbers given in this footnote apparently relate to the numbering system used for California OSHA standards and requirements and would be enforceable in California.
Based on this footnote, California has specific concerns regarding gluteraldehyde exposure. This is of interest to funeral service since gluteraldehyde is used in a number of embalming chemicals, in place of formaldehyde, and is used in disinfectants such as Cidex. The footnote is also consistent with similar concerns that have been expressed regarding the safe use of this chemical which has also been reported banned in the United Kingdom as a hospital disinfectant.
In the past, OSHA has considered adopting a specific Standard regulating the safe use of gluteraldehyde as it had done with formaldehyde. OSHA held several public hearings relating to the specific regulation of gluteraldehyde by a standalone standard but, to date, has not yet issued a Notice of Proposed Rule Making. OSHA State plan states, such as California, can adopt their own safety and health standards, in addition to ones adopted by Federal OSHA, as long as they are as stringent or more stringent than an existing Federal Standard. State Plan States can also adopt Safety and Health Standards for perceived hazards in their jurisdictions for situations that are not covered by a Federal OSHA Standard or Regulation. Such action by a State Plan State, would be observed, monitored and considered by Federal OSHA and could become the basis of a subsequent Federal Regulatory Standard.
NFDA members, who are using gluteraldehyde based products, are cautioned to review material safety data sheets provided by the manufacturer of such products and scrupulously observe all warnings and safe guards recommended or required by the manufacturer relating to the use of the product.
Office of Personnel Management - Working with OPM to assist them in developing regulations regarding providing flags for federal employees who are killed in the line of duty.
Government Accounting Office – Working with GAO and the Senate Homeland Security Committee to study the lack of and need for a comprehensive, uniform federal mass fatality management plan.
Centers for Disease Control and Response – NFDA has begun discussions with representatives of CDC's Office of Public Health Preparedness and Response to establish a working partnership on issues of importance to funeral service. We believe this new relationship will be very beneficial to us and them especially in the area of mass fatality management.