It’s Back – the Employee Free Choice Act

Organized labor’s top agenda item has returned to Congress. Rep. George Miller (D-CA) and Sen. Edward Kennedy (D-MA) introduced the Employee Free Choice Act (EFCA) which would require union representation to be certified if more than half of employees sign preference cards and would eliminate the current requirement for a secret ballot.

 Better known as the “card check” bill, it was introduced in the last session of Congress, but there’s a bit less support this time around. In the House, there were 11 fewer co-sponsors; in the Senate, seven fewer. Although it will probably never see action, Republicans introduced the Secret Ballot Protection Act that would do the exact opposite of the EFCA.

 Thawing Small Business Credit

President Obama and Treasury secretary Timothy Geithner announced several measures designed to make credit more readily available to small businesses. By the end of March, the Treasury Department is to begin buying securities backed by Small Business Administration (SBA) 7(a) loans and raise the guarantee on these loans to as much as 90 percent. Treasury also plans to buy mortgage securities backed by SBA’s 504 loan program that finances land and building purchases. Fees for both types of loans will be eliminated temporarily. Furthermore, banks will have to report to Treasury the volume of loans they make to small businesses. 

 IRS Rules on Five-Year NOL Carry-Back

The Internal Revenue Service (IRS) issued guidance in Revenue Procedure 2009-19 on how small businesses can take advantage of the five-year carry-back period for 2008 net operating losses (NOLs) created in the American Recovery & Reinvestment Act (ARRA). Key point: In order to use the special carry-back provisions, businesses must elect to do so by April 17, 2009. Once made, the election cannot be changed, according to the IRS. Revenue Procedure 2009-19 and a list of questions and answers are available at www.irs.gov. Small business corporations can call 1-800-829-4933 with NOL questions; other small businesses can call 1-800-829-1040.

 New COBRA Notices Due in April

The Department of Labor (DOL) announced the availability of four COBRA model notices, including one on the new extended COBRA coverage, and 25 frequently asked questions and answers. ARRA requires employers with 20 or more employees and a group health plan to provide three COBRA notices. The notice on extended coverage must be provided to employees, including employees who were terminated between Sept. 1, 2008, and Feb. 16, 2009, by April 18, 2009. DOL has created packages of information needed to comply with ARRA notice provisions. Information is available at www.dol.gov/ebsa/COBRA.

 Health Care Reform by August?

Health care reform could be the next big item on Congress’s agenda. The chairmen of the three House committees that are writing a health care reform bill – Ways & Means, Energy & Commerce and Education & Labor – told Obama the House would pass a health care bill before the August recess. Democratic aides to the Senate Health, Education, Labor & Pensions Committee said the same thing, while the chairman of the Senate Finance Committee wants action by June.

 Housing Bill Includes Bank Account Insurance

The House passed mortgage relief legislation which has at least one provision of interest to anyone with a bank account. The bill would make the $250,000 Federal Deposit Insurance Corp. deposit insurance maximum permanent. Under current legislation the $250,000 maximum expires at the end of this year and reverts to $100,000.

 The bulk of the bill seeks to help distressed homeowners by allowing bankruptcy courts to provide mortgage relief if justified and would give lenders the ability to “claw back” or recoup losses from write-downs if the home is sold for a profit within five years.

 In separate action, the president announced a Homeowner Affordability & Stability Plan centered on loan modification and loan refinancing. Under loan modification, the government would offer financial incentives and subsidies to mortgage services that ease loan demands on borrowers in financial straits. Under loan refinancing, Fannie Mae and Freddie Mac would refinance loans for borrowers who owe more than their homes are worth. The Departments of the Treasury and Housing & Urban Development set up a Web site – www.MakingHomeAffordable.gov – to help homeowners determine if they are eligible to modify or refinance mortgages how much monthly mortgage savings might be.