Legislative Proposal Offers Something for All, Encompassing an Extension for Reporting on Beneficial Ownership Information.
Legislative Proposal Offers Something for All, Encompassing an Extension for Reporting on Beneficial Ownership Information.
With each passing second, Congressional leaders have at long last disclosed the text of a prospective funding bill to keep operations running smoothly. As predicted, it's a short-term measure, extending government funding till March 14, 2025. However, failure to act prior to December 20, 2024 may lead to funding shortages for numerous government entities.
Do not be misled by the "brief" in the term "short-term": the bill stretches a whopping 1,547 pages long. (In contrast, the September 25, 2024, provisional arrangement, which extended funding until December 20, 2024, contained only 21 pages.)
Crucial Components
The bill is overflowing with programs and adjustments. Let's explore some of the key (and interesting) features of the bill.
As previously, the interim arrangement primarily funds the majority of programs and activities, including the military, at the fiscal year 2024 levels.
The bill also includes about $100 billion in federal aid for natural disasters, including funds for those affected by Hurricanes Helene and Milton, as well as an additional $29 billion for the Federal Emergency Management Agency (FEMA) disaster fund. You may recall that the agency announced in August that the disaster fund had run dry.
The bill also funds the reconstruction of the Francis Scott Key Bridge in Baltimore following its damage by the cargo ship Dali in March.
The bill also provides $21 billion in economic aid for farmers impacted by disasters—a move that hitherto delayed negotiations—but does not address IRS funding. (As stated earlier, a continuing resolution that would prolong funding levels from 2024 would also feature an extra $20 billion cut to IRS funding.)
There are provisions related to literacy, mental health, lodging fees, ticket costs, and blockchain—along with countless healthcare provisions, including funding for public health programs, pharmacy oversight, and anti-overdose and suicide prevention programs.
There seems to be something for everyone, with the exception of National Football Conference – Eastern Division supporters disapproving of the Commanders. The bill includes a provision to transfer jurisdiction of the Robert F. Kennedy Memorial Stadium Campus site from the federal government to the city of D.C. for 99 years. This would allow the Commanders to negotiate a new stadium at the site (the team's lease at FedEx Field ends in 2027.)
Extension of Beneficial Ownership Information (BOI)
Hidden within the bill is language that would postpone the BOI reporting requirements under the Corporate Transparency Act (CTA). The CTA aims to make it more challenging for shady actors to shield their identities and ill-gotten gains through shell companies or complex corporate structures by requiring information about the owners, including their names, dates of birth, addresses, and scanned images of identifying documents (such as a driver's license or passport)—from each presumed "beneficial owner." The same information, generally, needs to be provided for a corporate applicant—usually the individual who establishes the company (most frequently, a corporate formation company or a lawyer).
Those reports are submitted online to the Financial Crimes Enforcement Network (FinCEN). FinCEN anticipated receiving over 32 million reports in the first year that the law took effect—for 2024.
The move was celebrated by the National Small Business Association, with NSBA President and CEO Todd McCracken stating, "NSBA has been fighting against the CTA for years. There is widespread confusion and significant concern among America's small businesses about the BOI reports, and by including this delay, it provides much-needed predictability for small businesses."
McCracken praised the lawmakers, adding that the "NSBA will continue to oppose this law through our lawsuit, the first one filed in the nation which is now awaiting judgment from the Eleventh Circuit Court of Appeals." The lawsuit that
Months after the CTA was enacted, the NSBA filed suit in federal court. On March 1, 2024, U.S. District Judge Liles C. Burke of the Northern District of Alabama, Northeastern Division, declared the CTA unconstitutional. In his opinion, Burke, a Trump appointee, wrote, "Congress sometimes enacts smart laws that violate the Constitution." This case, he continued, "demonstrates that principle." The Government promptly appealed the ruling to the Eleventh Circuit, and the oral arguments were heard in October of this year.
Additional lawsuits followed suit, including a decision in the U.S. District Court for the Eastern District of Texas. In this case, Judge Mazzant, an Obama appointee, granted the request of the National Federation of Independent Business (NFIB) for a preliminary injunction, preventing the U.S. Department of Treasury from imposing the CTA's reporting requirements. Since NFIB and its nearly 300,000 members were a party to this case, the judge blocked enforcement of the BOI reporting requirements nationwide. The U.S. government appealed, and the matter is currently being resolved in the Fifth Circuit.
While litigation continues, FinCEN has retreated from its position that filings should continue, stating on its website, "While this litigation is ongoing, FinCEN will comply with the court order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect." For now, reports are voluntary.
The result has been baffling for business owners and advisors. A Congressional delay would offer all parties some additional time while the court case is resolved.
The proposed modification would alter the submission timeline for established entities. To be specific, the revised text would state, "In accordance with directions set by the Treasury Department's Secretary, any reporting organization that has been established or registered prior to January 1, 2024, is to submit, no later than January 1, 2026, a report to FinCEN, encompassing the details outlined in paragraph (2)."
McCracken commented on the amendment, stating, "This delay serves as an ideal holiday present for the countless small-business owners nationwide, who were burdened with an intricate regulatory framework, and penalties reaching up to $591 PER DAY and a maximum imprisonment term of two years."
Details Regarding the Bill
There are no budget compensations incorporated in the bill – only expenses.
(No references to Social Security and Medicare programs – no necessity exists. The supposedly entitlement programs are automatically renewed and are beyond discretionary control.)
Republicans hold a minor edge in the House, necessitating Democratic support to pass the bill – House Speaker Mike Johnson (R-La.) appears to believe he has it. Nonetheless, the deliberation date for a vote on the spending bill has yet to be disclosed.
You can review the full text of the bill here (have a beverage nearby).
The proposed modification in the funding bill extends the deadline for established entities to submit Beneficial Ownership Information (BOI) reports to FinCEN, as required by the Corporate Transparency Act (CTA), to January 1, 2026. This amendment is seen as a holiday present for small businesses, as it alleviates the burden of the intricate regulatory framework and potential penalties.
The bill, with its 1,547 pages, does not include any budget compensations; it only outlines expenses. As a result, entitlement programs like Social Security and Medicare, which are automatically renewed and beyond discretionary control, are not mentioned in the text.
Failure to act prior to December 20, 2024, may lead to funding shortages for numerous government entities, as mentioned in the bill. This short-term funding measure extends government operations till March 14, 2025, but the potential consequences of inaction should not be overlooked.
The interim arrangement primarily funds the majority of programs and activities, including military, at the fiscal year 2024 levels. However, it falls short of providing funding for the Internal Revenue Service (IRS), as a continuing resolution featuring extended funding levels from 2024 would also include an additional $20 billion cut to IRS funding.