The Times West Virginian

Business

January 26, 2014

Legislation designed to help small businesses get back on their feet

FAIRMONT — Legislation is being considered to help small businesses get back on their feet in emergency situations.

The West Virginia Small Business Emergency Act passed in the House of Delegates on Jan. 16, and is now awaiting action in the Senate. This is the first bill that the House’s new Small Business, Entrepreneurship and Economic Development Committee reviewed and passed.

House Speaker Tim Miley, D-Harrison, explained that the House of Delegates’ rules define the standing committees that exist in this governing body. At the beginning of the new legislative session, the House changed the rules to modify the number and types of standing committees. One stand-alone committee created was the Small Business, Entrepreneurship and Economic Development Committee.

The recent chemical spill into the Elk River that affected the water supply in nine West Virginia counties brought to the forefront the need to have some type of assistance available for small businesses, he said. Many businesses, especially restaurants, had to close for a number of days due to the situation.

“I think it’s a pretty important bill and a pretty important concept to small businesses generally,” Miley said. “It provides a framework to the governor giving him wide latitude to create emergency relief funds for small businesses on a case-by-case basis whenever a state of emergency is declared.”

He said the legislation is an effort to make sure that any type of state of emergency doesn’t cause small businesses to shut down for good. Unlike large corporate enterprises, small businesses don’t necessarily have the cash reserves to be able to stand not being in business for a period of time.

Not every business is going to be affected in the same manner during a state of emergency. For this reason, the bill would allow the governor to address each state of emergency as it presents itself and identify the small businesses that might be in need of relief funds, Miley said.

The governor would consider a wide variety of factors, such as the most vulnerable small businesses and those that may not have insurance coverage for a state of emergency, he said.

“It was designed to be a no-interest or low-interest loan program,” Miley said. “It's not a giveaway program. It’s not a grant program.”

The small business emergency relief could also involve allowing small businesses to defer payment of their monthly state employment taxes, or could include some other type of

assistance provided by the state, he said. The hope is that a streamlined application process would be created so small businesses can apply based on the framework set by the governor.

“We’re going to continue focusing our efforts on small businesses and trying to identify things we as a Legislature can do to allow small businesses and entrepreneurs to flourish in West Virginia,” Miley said of the Small Business, Entrepreneurship and Economic Development Committee.

“It is critical that we create an environment in which businesses of all sizes can succeed. We need to make sure we maintain an intense focus on the needs of small business and entrepreneurs in the state.”

Being in the effected area of the water crisis, Delegate Doug Skaff, D-Kanawha, saw that so many small business owners were scared of having to shut their doors and not being able to reopen. Those businesses — including restaurants, hair salons, dental offices, small hotels, and any others that needed water to open — were afraid they wouldn’t be able to afford their bills because of a scenario that was out of their control.

Skaff, who is the chairman of the House’s Small Business, Entrepreneurship and Economic Development Committee, said unlike disasters like derechos and flooding that destroy physical structures, the water contamination resulted in a loss of income related to chemicals coming through the pipes that forced businesses to close. While most businesses have insurance to cover damage to their building, they don’t normally have insurance to cover the effects of a state of emergency.

“With the help of the leadership of the House of Delegates, we wanted to fast track this bill as quickly as possible,” he said. “I was just really excited that everybody worked so hard because they saw the urgency.”

The governor would work with existing state agencies to establish assistance in various forms. The legislation would create opportunities to give businesses some flexibility during hard times, Skaff said.

“This is no extra burden on the taxpayer because all the money will be paid back with low interest, and also the taxes that may be deferred will be collected at a later date,” he said.

The goal is to get businesses back open, because that gets employees back to work.

“We just basically create the road map or the framework for recovery,” he said.

Skaff pointed out that this emergency relief would only apply to a state of emergency situation on Jan. 1 of this year or afterward, which includes the people affected by the water crisis. Assistance could not be sought retroactively for scenarios that happened before this year.

He anticipates that the Senate will amend the legislation and put some more controls in place, which could delay the bill a few days. If all goes well and the act is fast-tracked in the Senate, there is a possibility it could be passed by the end of next week, Skaff said.

“We just need to show that there’s hope out there so these businesses aren’t forced to close or shut down because they can’t make their payroll,” he said. “We don’t know how many are going to take advantage of it or to what extent, but at least we give them the opportunity to take advantage of it.”

Delegate Tim Manchin, D-Marion, also serves on the House’s Small Business, Entrepreneurship and Economic Development Committee.

“The small businesses are pretty much the backbone of the West Virginia economy and particularly our communities, and when a state of emergency is declared because of a disaster, it can have catastrophic effects on those small businesses,” he said.

Manchin said he recently talked to a restaurant owner in Charleston whose business had lost $40,000 in revenue due to the chemical leak. The owner was more concerned about her employees, who had lost a lot of work time, than herself.

The West Virginia Small Business Emergency Act would offer ways to keep businesses operating instead of having to shut down in situations like a derecho or a water crisis, he said.

“When we heard how long these businesses were being shut down and the number of businesses being shut down, that got us thinking ... about the harm that could be done to those community businesses,” Manchin said. “I think that helped pass the bill.”

Being proactive is always preferred, but unfortunately in some situations — like the water crisis — the Legislature has to react, he said. This new bill would help many businesses impacted by the water situation as well as provide assistance in the case of future derechos, flooding or other significant weather-related problems.

“We’ve got something now in place that will allow the state of West Virginia to go in and actually supply quick help to keep these businesses going,” Manchin said. “I think that’s a really worthy goal.”

Email Jessica Borders at jborders@timeswv.com or follow her on Twitter @JBordersTWV.

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