Federal Activities & Legislation
2010 Advocacy Highlights
Support for Small Businesses
In 2009 and 2010, ASTA has endorsed legislation to help small business travel agents to navigate the recession, including:
- The Home Office Deduction Simplification Act (H.R. 1509)
Introduced by Rep. John McHugh (R-NY)
The Home Office Deduction Simplification Act would allow individuals to elect to take a standard deduction in the amount of $1,500 for home office expenses. H.R. 1509 is designed to simplify the tax code and relieve a regulatory burden on small businesses; many currently do not take the deduction because it is complex and time-consuming to calculate. While we would prefer a standard deduction greater than $1,500, ASTA supports H.R. 1509 as a good first step towards tax fairness for home-based businesses.
- The Small Business Formation and Job Creation Act (H.R. 1552)
Introduced by Rep. Frank Kratovil (D-MD) and Rep. Chris Lee (R-NY)
Under current law, small businesses are permitted to write off up to $5,000 of their total start-up costs. H.R. 1552 would immediately expand that amount to $20,000. The bill is intended to help start-ups get off the ground and withstand the effects of the economic crisis. ASTA supports H.R. 1552 because it offers new entrants to the travel agency market an added incentive to invest in their communities and to create new jobs.
- The Small Business Credit Card Act of 2009 (H.R. 3457)
Introduced by Rep. Neil Abercrombie (D-HI)
The Credit CARD Act of 2009 extended new protections to consumers from certain longstanding practices by credit-card issuers, including "bait-and-switch" interest rates, excessive rate increases, and retroactive rate hikes on past-due balances. Unfortunately, the bill did not apply these protections to small-business owners who finance purchases using business credit cards. ASTA called for an amendment to close this loophole. The amendment failed, but Rep. Neil Abercrombie has introduced legislation to ensure that small business owners are eligible for these protections. ASTA has endorsed this bill, and continues to advocate for its passage.
Small Businesses Lending
During the current period of economic uncertainty, many small businesses are finding it difficult to obtain credit to grow their business or to cover unplanned expenses. An ASTA-supported program to provide aid to travel agents and other small businesses in the form of direct loans was included in the House-passed version of H.R. 1, the American Recovery and Reinvestment Act but was stripped out of the bill in closed-door negotiations shortly before the final version was passed.
ASTA is in continued contact with the SBA and with the relevant committees in the House and Senate to ensure that the voice of small business travel agents is heard during the ongoing credit crisis. Both the stimulus package and President Obama's 2010 and 2011 Budget proposal contained expanded loan programs for small businesses. ASTA is tracking these programs and is working to educate ASTA Members about sources of government aid during these difficult economic times.
In early 2010, ASTA endorsed The Small Business Emergency Capital Assistance Act of 2009 (H.R. 4295), a bill by Rep. Joe Courtney (D-CT) that would direct the SBA to create a direct lending program.
Passenger Rights Legislation
Working with industry allies at the Business Travel Coalition and the Coalition for Passenger Rights, ASTA has advocated for the swift passage of legislation to create a 3-hour ‘back-to-gate" standard that would allow passengers experiencing lengthy on-board tarmac delays the opportunity to exit the aircraft. The Federal Aviation Administration expanded regulatory protections for delayed passengers, including greatly expanded fines for airlines. Passenger rights legislation is expected to pass in 2010 as part of the long-delayed FAA Reauthorization bill.
State and Municipal Taxes on Travel Agents
ASTA is engaged in multiple, simultaneous state-level battles over proposals to tax travel agents' service fees for the online booking of hotel rooms. Last year, ASTA's Government Affairs Department, working with its industry allies and a small group of dedicated members of the New England Chapter, succeeded in removing from the Governor's 2010 Massachusetts state budget proposal a provision that would have imposed an unprecedented double tax on travel agencies' income stream, thereby neutralizing a serious threat to hundreds of traditional agencies in Massachusetts. ASTA also fought-and worked to interpret for Members-a new and novel occupancy tax in New York City.
In 2009 and 2010, ASTA has fought such taxes in Minnesota, Pennsylvania, Maine, Florida, and Virginia. As states continue to look for new sources of revenue to replenish depleted state treasuries, we expect to continue to fight this battle across the country.
Independent Contractor Legislation
In 2007, Senators Durbin and Obama of Illinois introduced legislation that would apply greater scrutiny to the question of worker classification. The bill was one of several introduced in the 110th Congress to address the so-called "tax gap" caused by the supposedly improper classification of workers for tax reporting purposes. Many in the small business community, including ASTA, are concerned that this type of legislation could undo longstanding protections for businesses that rely on the services of independent contractors, and would force employers to assume massive new costs in the forms of FICA taxes, benefits, and compliance-related expenses.
Unfortunately, Sen. John Kerry (D-MA) and Rep. Jim McDermott (D-WA) have recently introduced legislation that would make it much more difficult for employers to continue to use the services of independent contractors. ASTA is working with two industry coalitions to oppose this legislation and ensure that independent contractor status is preserved under federal law.
Insecticides provision in Aviation Bill
The draft version of a massive bill to authorize the operations of the Federal Aviation Administration (FAA) contained a provision that would have required travel agents to disclose to anyone buying an airline ticket the name of any pesticide that had been applied on board the specific aircraft for which the ticket was sold, dating back 60 days. Obviously, complying with this requirement would be all but impossible, and would impose a new, hugely complicated federal mandate on travel agents.
ASTA conveyed these concerns to the appropriate committee staff on Capitol Hill. In a major victory for the travel agency community, these discussions have resulted in a revised version of this provision that removes any significant new obligations on the travel agency community.
Airline Merchant Fee Shifts
In late June of 2009, ASTA learned that United Airlines was notifying a select number of travel agencies across the country that they would soon no longer be permitted to use United's merchant account for processing ticket sales by credit card. In response, ASTA began an aggressive lobbying and public relations campaign to educate Members of Congress, the media, and other interested parties of the threat posed by United's actions.
One element of the effort was a coordinated grassroots campaign in which ASTA Member travel agents wrote, called, and e-mailed their elected representatives to request their help in stopping or delaying the United policy. ASTA and its industry allies believed that the most severe danger in the short term was that United would expand the policy to all travel agencies, and that the other airlines would quickly follow suit. Within a matter of days, ASTA's advocacy efforts were being covered by BusinessWeek, the New York Post, USA Today, Travel Weekly, and MSNBC.
Since last summer, a total of twenty Members of Congress have responded to ASTA's concerns by writing to United CEO Glenn Tilton to express their concerns over the implications of this policy for small businesses and consumers. Under pressure from ASTA, the press, and Congress, United agreed to grant a 60-day delay in implementing the policy, and to date has not expanded it beyond the original group of agencies.
The fight goes on. ASTA continues to encourage key Members of Congress to examine the merchant fees issue and what it means for the future of the travel distribution marketplace.
Secure Flight Program
Completing a process that began in 2004, the Transportation Security Administration (TSA) recently finalized a new airline passenger screening system known as Secure Flight. Consistent with the recommendations of the 9/11 Commission, a key feature of the Secure Flight program is the shifting of pre-departure watch list matching from the airlines to the TSA. ASTA has worked with the TSA since the program was first announced to ensure that the needs of the travel agency community and the travelling public were taken into consideration in the program's development. Most of the extensive comments ASTA had filed during the program's development were included in the Final Rule, including an extension of the implementation schedule to 270 days from the original 60 days. Now that the government's focus has shifted to implementation of the rule, ASTA will continue to work with travel agents and the TSA to assist the agency community in educating their customers and in complying with the program's requirements.
2009 activities
ASTA Requests that Credit Card Bill Ensure Fair Treatment for Small Businesses
Congress is debating a comprehensive overhaul of the rules protecting the nation's credit card owners from unfair and deceptive business practices. Among other provisions, the bill includes limits on interest rate increases and more transparent disclosure of fees. Unfortunately, the House-passed version of the bill failed to include an amendment that would have clearly extended the bill's protection to small business owners who use credit cards to finance business-related purchases. On May 11, 2009, ASTA President and Chair Chris Russo wrote to Sen. Chris Dodd (D-CT), the Chairman of the Senate Banking Committee, to request that the Senate's version of the bill include this protection for small business owners. ASTA has also joined forces with its allies in the small business community to support an amendment by Senators Mary Landrieu (D-LA) and Olympia Snowe (R-ME) to ensure that small businesses are not excluded from the bill's reforms.
ASTA Letter to House Committee on Transportation and Infrastructure and Subcommittee on Aviation
Letter to key Members of Congress sent by ASTA and industry allies to request removal of insecticides reporting requirement from FAA reauthorization bill
- ASTA Letter to Congress [PDF]
ASTA Letter to Karen Gordon Mills, Nominee for SBA Administrator in incoming Obama Administration
On December 23 2008, ASTA congratulated Karen Gordon Mills on her nomination as Administrator of the Small Business Administration and repeated its request that the SBA use its direct lending authority to provide access to credit for small business owners in economic distress.
Key Small Business Legislation in the 111th Congress
H.R. 1 - The American Recovery and Reinvestment Act [PDF]
Introduced on January 26, 2009 by Rep. David Obey (D-WI)
Current status: Passed the House on January 28; Passed the Senate on February 10
Signed into law by President Obama on February 17
ASTA supported this bill because it included a variety of new resources to help small business owners, including a provision to increase secondary market liquidity for small business loans; increased funding for the "microloan" program; expanded budgetary authority for the Small Business Administration; and fee reductions for existing SBA loan products.
Unfortunately, an ASTA-supported provision to create a new direct lending program for small businesses was stripped out in final, closed-door negotiations.
H.R. 1509-The Home Office Deduction Simplification Act [PDF]
Introduced on March 16, 2009 by Rep. John McHugh (R-NY)
Current status: Referred to the House Ways and Means Committee; awaiting consideration
The Home Office Deduction Simplification Act would allow individuals to elect to take a standard deduction in the amount of $1,500 for home office expenses. H.R. 1509 is designed to simplify the tax code and relieve a regulatory burden on small businesses; many currently do not take the deduction because it is complex and time-consuming to calculate. While we would prefer a standard deduction greater than $1,500, ASTA supports H.R. 1509 as a good first step towards tax fairness for home-based businesses.
H.R. 1509 has bipartisan support in the House of Representatives; as of April 8, 2009, the bill has 18 cosponsors.
Joining ASTA in supporting H.R. 1509 is a broad coalition of small business groups, including the Alliance of Visual Artists, American Homeowners Grassroots Alliance, Associated Builders & Contractors (ABC), Association for Enterprise Opportunity (AEO), National Association for the Self-Employed (NASE), National Federation of Independent Business (NFIB), National Small Business Association (NSBA), Professional Photographers of America, Small Business & Entrepreneurship Council, Small Business Legislative Council (SBLC), and Women Impacting Public Policy (WIPP).
H.R. 1552- The Small Business Formation and Job Creation Act [ [PDF]
Introduced on March 17, 2009 by Rep. Frank Kratovil (D-MD) and Chris Lee (R-NY)
Current status: Referred to the House Ways and Means Committee; awaiting consideration
Under current law, small businesses are permitted to write off up to $5,000 of their total start-up costs. H.R. 1552 would immediately expand that amount to $20,000. The bill is intended to help start-ups get off the ground and withstand the effects of the economic crisis.
ASTA supports H.R. 1552 because it offers new entrants to the travel agency market an added incentive to invest in their communities and to create new jobs.
2008 Activities
ASTA Letter to SBA Requesting Creation of New Direct Lending Program
On November 17, ASTA requested that the Small Business Administration use its direct lending authority to provide access to credit for small business owners in economic distress.
ASTA Calls on Incoming Obama Administration to Lift Cuba Travel Ban
ASTA is calling on President-elect Obama to permit Americans to travel to Cuba. Click here to see a recent letter to the President-elect from ASTA and other business community allies calling for a change in US policy toward Cuba.
Testimony before House Small Business Committee
On June 26, 2008, ASTA testified before the House Committee on Small Business at a hearing entitled: "How the Air Transportation Crisis is Hurting Travelers, Entrepreneurs and the Economy." In his testimony, Paul Ruden addressed the negative effect the current airline crisis is having on leisure and business travel, as well on the travel agency industry specifically. Ruden highlighted two worrisome developments--additional ticket restrictions and checked baggage fees--that illustrate the troubling direction of the airline industry.
In his testimony, Ruden said that the short-term outlook for passenger aviation is not encouraging. He pointed to two recent examples to illustrate the troubling direction of the industry. First, since May 1, nearly every major carrier has made significant changes to its fees on checked baggage. From the perspective of travel agents, such practices come with an added burden: that of monitoring and mastering a Byzantine set of new and overlapping policies and policy revisions so as to be able to apprise customers of what to expect when traveling. ASTA and ITSA recently sent a joint letter to the Department of Transportation to express their shared concern about the manner in which air carriers are disclosing (or failing to disclose) the terms of these new policies. He also pointed to another troubling practice: that of creeping ticketing restrictions. Ruden predicted that as these practices continue, so, too, will the already dire erosion in goodwill and trust between carriers and the traveling public. He closed by asking the Committee to enact meaningful reform to inject some measure of good sense and accountability to the current system before it worsens further.
Insecticides provision in Passenger Rights bill
Senior members of the House Transportation and Infrastructure Committee have introduced legislation to require the airlines to comply with certain passenger rights guidelines. The legislation tracks closely with previous passenger rights legislation towards which ASTA is generally supportive in principle. Unfortunately, the bill contains a provision that would require ticket agents to disclose to anyone buying an airline ticket that a pesticide-identified by name-has been applied within a 60-day period on the particular aircraft on which they will be flying. Complying with this requirement would be all but impossible, and would impose a new, hugely complicated federal mandate on travel agents. ASTA and ITSA sent a joint letter to the Members of the Transportation and Infrastructure Aviation Subcommittee to express their concerns, and we are working with Committee staff on Capitol Hill to try to remove this provision from the bill before it proceeds any further.
ASTA Joins Coalition to Oppose Oil Speculation
ASTA has joined the Stop Oil Speculation Now Coalition, an organization of industry associations, labor groups, airlines, and other business groups in support of changes to the nation's energy policy in hopes of lowering fuel prices. The Coalition has run advertisements in the Wall Street Journal, the Politico, and The Hill, and coordinated the distribution of "An Open Letter to All Airline Customers" from twelve major airlines. To date, the Coalition's efforts have focused on encouraging legislators to close loopholes that permit excessive involvement in oil futures markets by speculators making high-volume trades. Future planned activities include Capitol Hill visits and the placement of additional advertisements in national media outlets. Click here to visit the Stop Oil Speculation Now web site.
Comments on proposed US Exit Program
The Department of Homeland Security recently proposed a rule to enact a new "US Exit" program. As written, this rule would require carriers to collect the fingerprints of any alien crew members as well as any alien passengers seeking to leave the United States aboard an airplane or cruise ship and transmit this biometric information to DHS within 24 hours of departure. For a host of reasons, this proposal is completely unworkable. Even if it could be complied with, it would require a staggering investment of time, infrastructure, equipment, personnel, and training. It would amount to a massive unfunded mandate on the airlines, and the ripple effects in terms of delays and cost would affect the entire travel industry. Moreover, it would effectively deputize airline and cruise ship employees to carry out a federal law enforcement function.
In response, ASTA submitted public comment to register its strong opposition to this proposal, and to urge DHS to go back to the drawing board to create a workable plan. Other industry groups have done the same, and we continue to monitor this developing issue.
