Legislative Alert : Updated January 2014
I attended the State Government Affairs Conference in San Antonio, TX on November 19, 2013. This conference is sponsored by the National Restaurant Association and attended by their political staff and most of the state restaurant association executives.
The agenda provided an update on the national and state political environments as well as training sessions on how we could be more effective in representing our associations. There was a lot of interest in the future of the Affordable Care Act. It was generally agreed, that if the web site continued to improve and significant numbers of people were able to log on and review health care options by the end of the year, there would no way to muster enough congressional votes in favor of repealing it to override a presidential veto.
There is broad bipartisan support for modifying the ACA and the President seems open to that. Legislation has been introduced in both the House and the Senate, supported by the National Restaurant Association, to make the following changes to the ACA:
- change the law’s definition of full-time to 40 hours a week from 30
- simplify the calculation to determine who’s a large employer, and
- eliminate the auto-enroll mandate that requires companies with 200 or more full-time employees to automatically enroll full-time employees in a company health plan if they haven’t opted out within 90 days.
We will continue to coordinate with the National Restaurant Association and work with our congressional delegation to generate support for these necessary changes.
Health Care: The Patient Protection and Affordable Care Act
In a major victory for employers who have been struggling to understand and figure out how to implement the 2010 health care law, the Treasury Department announced July 2 that it has delayed by a year the law’s mandate that requires “large employers” to report to the IRS whether they offered their full-time employees and their dependents health care coverage in 2014.
The IRS will use 2014 as a year of transition and voluntary reporting, and has pushed mandatory reporting for large employers and insurers to Jan. 31, 2016, to track data on health care coverage employers offered in 2015.
Since the reporting mandate is aimed at giving the IRS a tool to calculate and assess penalties against large employers that failed to offer coverage to full-time employees, the delay in the reporting requirement means large employers will not face penalties under the law for failing to offer health care coverage to their full-time employees in 2014.
The National Restaurant Association has been one of the top employer groups arguing for transition rules and more flexibility for employers as the law is implemented
Legislation has been introduced in the House and Senate to dramatically increase the federal minimum wage. The Fair Minimum Wage Act of 2013 (S. 460, by Sen. Tom Harkin, and H.R. 1010, by Rep. George Miller) would increase the federal minimum wage from the current $7.25 to $10.10 over two years and three months—a nearly 40 percent increase—and automatically index the wage to inflation each year thereafter, regardless of economic conditions. The legislation also calls for increasing the minimum cash wage for tipped employees until it reaches 70 percent of the federal minimum wage. This means the minimum cash wage for tipped employees would triple, in stages, to $7.07.
The nation is experiencing the lowest labor participation rate in three decades. Unemployment in the U.S. remains above 7 percent. Teen unemployment is over 22 percent, with higher rates in some urban and rural areas. As businesses struggle to recover from the economic recession, dramatic, mandatory wage increases such as those proposed under the Fair Minimum Wage Act of 2013 would place yet another financial burden on business owners who are already feeling the pressures of a weak economy and additional costs and regulatory complexity associated with the Affordable Care Act.
Restaurants are a critical provider of first jobs for young people across the country. A mandatory wage increase could further restrict opportunities for young and less-skilled individuals.
The National Restaurant Association urges opposition to the Minimum Wage Fairness Act (S. 1737, and similar proposals to increase the federal minimum wage.
A comprehensive immigration reform bill was passed in the Senate. The House of Representatives will be debating the issue this session. Foreign policy, debt limit and budget issues will be competing for time and immigration will not be taken up until these issues are resolved. Continued pressure on our representatives is necessary to move the agenda in a positive direction.
We have been working with the Nebraska Coalition for Immigration Reform to encourage comprehensive immigration reform legislation. Our strategy has been to present the facts about immigration to the general public via presentations and forums in five communities across the state, Crete, Omaha, Norfolk, Lexington and Scottsbluff. A summary of each forum was published in Prairie Fire Journal. We are now drafting a final publication summarizing what we have learned.
One of our recommendations is for the Nebraska Legislature to draft of a resolution requesting federal action on immigration reform. Senator Wightman has agreed to introduce the resolution and we have a bipartisan group of twelve co-sponsors.
There is an excellent chance that this will pass the Legislature and inform our congressional delegation that Nebraska is on record supporting legislation already passed by the Senate and introduced in the House of Representatives.
The 2014 session of the Nebraska Unicameral convened on January 8. This is the second session of the two year legislative cycle. Along with new bills introduced this year, any bills introduced in the 2013 session and not acted on are still alive and can be acted on. The 2013 session was a “long” 90 day session. This year is a “short” 60 day session. The 60 day limit combined with the fact that four senators are running for Governor will make it a very interesting session. Here are some of the issues we are addressing:
Sales Tax Collection Fees
Nebraska restaurants collect and remit sales tax and receive practically nothing for this service. The cost to restaurants is significant especially on credit card sales. To understand how blatantly unfair the situation is, take a look at $100 credit card sale. In Omaha or Lincoln, that results in $7 sales tax which also goes on the credit card. After the credit card company deducts the swipe fee, an average restaurant is left with $6.86 but still remits $7 to the state. To address this, Senator Schumacher introduced LB 333 at our request which would significantly increase sales tax collection fees retained by collectors and remitters of sales tax. LB 333 is still alive and we are working to advance it this session.
In the recent past, the Cities of Lincoln, Omaha, Grand Island, and Norfolk have enacted occupation taxes to be collected by restaurants. State law presently requires cities to get legislative approval to increase city sales tax but allows cities to enact and raise city occupation taxes. We supported legislation to put control on future city occupation taxes by requiring most to go to a vote of the people effected but the legislation was not as limiting as we had hoped. In the 2013 session Senator Krist introduced LB 474 which would put further restrictions on occupation taxes. We are supportive. The bill advanced out of committee and will be considered this session.
Dram Shop – Mandatory Training for Servers and Sellers of Alcohol
“Dram Shop” refers to legislation that holds sellers/servers of alcohol liable for damage, injury, or death as a result of selling or serving an intoxicated person. Nebraska is one of the few remaining “non dram shop” states. There have been several attempts in past legislative sessions to make Nebraska a “dram shop” state. We have consistently and successfully opposed these past attempts.
Dram shop legislation was not introduced in the 2013 session but Senator Krist did introduce LB 444 which would require all servers and sellers of alcohol to be trained and certified and impose a statewide system similar to that which was recently enacted by the City of Lincoln. LB 444 is still alive in committee and will probably see action in this year. While we support training, we feel LB 444 is too onerous. We support training with the following provisions:
- Training programs be approved by the Nebraska Liquor Control Commission.
- A “train the trainer” approach be adopted requiring managers be trained and providing resources for them to train their respective staffs.
- State approved training programs would preempt city training.
- The training programs would be accessible on line and affordable.
- Training should be valid for three years and transferable from employer to employer.
Senator Avery is very concerned about child obesity. In a past session, he introduced a bill that would have placed significant dietary restrictions on a child’s meal that included a toy which did not advance out of committee. In the 2013 session he introduced LB 447 which would impose a sales tax on soft drinks sold in stores. While this does not directly impact restaurants, it does negatively impact some of our most supportive allied members and as a result, we are in opposition. The bill did not advance out of committee but could see action this session.