By Bruce Lundegren, Assistant Chief Counsel
With spring’s floodwaters rising across the Mississippi Delta and throughout Arkansas, it is no wonder that flooding and agricultural issues highlighted the Office of Advocacy’s recent Regulatory Reform Roundtable in rural Jonesboro. Farmers expressed concerns about planting their crops on time and the uncertain fate of their harvest should the rains continue, especially in the sizable rice fields of Northeast Arkansas, the world’s largest rice production area. One farmer stated that federal assistance for farmers hurt by the flooding and any harm caused by trade tariffs should be specifically targeted to small businesses. Other attendees stated that the Environmental Protection Agency’s Waters of the United States (WOTUS) rule was a major concern and created uncertainty in Arkansas counties.
Flooding and agricultural issues were not the only topics of discussion. A regional banker stated that SBA’s policy manual contains restrictions on “affiliations” that make it more difficult to market and lend to small businesses. He suggested revisions to SBA’s Standard Operating Procedures to address this issue. Several small pharmacy owners – including representatives from the National Community Pharmacists Association – spoke about the unfairness of the pharmacy “Direct and Indirect Renumeration” (DIR) fees that they said has led to inconsistent pricing and has forced many local pharmacists out of business. DIR fees refer to funds that a Medicare Part D plan/Pharmacy Benefits Manager (PBM) may collect in order to offset member costs. The issue is essentially who receives rebates and other price adjustments from drug manufacturers applied to prescription drug plans, but small pharmacies can be subject to claw back fees that they were unaware of at the time of sale. “The CMS regulation is very disheartening,” one pharmacy owner stated. “We understand the need for regulations, but putting a small business in a bind, that is already strapped, is unsustainable.” The pharmacists in attendance told Advocacy they were extremely disappointed that CMS did not finalize a draft regulation that would have addressed the pharmacy DIR fee issue.
As has been the case in many of Advocacy’s regional roundtables, the shortage of labor and qualified workers was a priority topic. The owner of a small construction company told Advocacy that his biggest problem is finding qualified labor. He stated, “The cost of construction is sky-rocketing because of the high labor costs.” He recommended common-sense immigration reforms that will help small businesses with the supply of labor needed for growth. He suggested the federal government create a worker visa program requiring immigrants to be pre-vetted for security and closely monitored while they are working in the United States. Another attendee complained that the H-2A visa program for temporary agricultural workers wasn’t working because foreign workers would come to the United States on an H-2A visa for agriculture and “visa jump” to another industry.
Transportation issues were also a topic of discussion. While attendees supported using small drones (i.e., small unmanned aircraft) to inspect crops and monitor livestock, one attendee from the agriculture aviation industry stated that drones need to be kept out of flight paths to keep them safe when seeding or spraying crops. Another attendee stated that Federal Transit Administration regulations requiring background checks for Medicaid-funded patient transit were too strict and were causing an unnecessary shortage of drivers.
It was an enthusiastic discussion led by small businesses, trade association representatives, and area congressional staff members. Attendees expressed appreciation for the opportunity to provide their input and said that they hope these issues can be resolved in a prompt manner.
Advocacy was in Arkansas, Tennessee, and Mississippi for Regional Regulatory Reform Roundtables June 4-6.
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For more information on Advocacy’s mission, our regulatory reform efforts or to find out where the next Regional Regulatory Reform Roundtables will be held, please visit: https://advocacy.sba.gov/regulation/regulatory-reform/.
Bruce Lundegren is an Assistant Chief Counsel for Advocacy whose portfolio includes safety, transportation, and security. Lundegren can be reached at bruce.lundegren@sba.gov.
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