Protect Small Businesses From Excessive Paperwork Act of 2025
Floor Speech
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Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 736) to amend title 31, United States Code, to modify the deadline for filing beneficial ownership information reports for reporting companies formed or registered before January 1, 2024.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 736
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protect Small Businesses from Excessive Paperwork Act of 2025''. SEC. 2. MODIFICATION TO FILING DEADLINE FOR CERTAIN PRE- EXISTING REPORTING COMPANIES.
Section 5336(b)(1)(B) of title 31, United States Code, is amended by striking ``before the effective date of the regulations prescribed under this subsection shall, in a timely manner, and not later than 2 years after the effective date of the regulations prescribed under this subsection,'' and inserting ``before January 1, 2024, shall, not later than January 1, 2026,''.
Mr. Speaker, I rise in strong support of H.R. 736, the Protect Small Businesses from Excessive Paperwork Act. I thank Representative Nunn of Iowa for his work on this important legislation.
In 2021, Congress passed the Corporate Transparency Act, known as the CTA. The goal of the CTA was to strengthen national security tools to target bad actors and nation-states attempting to launder money through illicit activities. To accomplish this, the CTA established the beneficial ownership information reporting regime through Treasury's Financial Crimes Enforcement Network, known across the country as FinCEN.
With an effective date of January 1, 2024, the CTA regulations required roughly 32,600,000 small businesses in the United States to report their beneficial ownership information to FinCEN by the following year. To the best of my knowledge, Mr. Speaker, only some 9 million, or one-third, of those required small businesses have filed.
Recent Federal court actions on this confusing and complex rule have just added to the confusion that many of our Members are hearing about from their constituents in their districts.
Although this law was enacted with good intentions, Treasury's promulgation and implementation of the new reporting regime has been overly complex and particularly burdensome. Over the last year, Members have heard consistently from their constituents that confusion reigns when it comes to beneficial ownership reporting requirements.
We have all heard not only from small businesses that are in the real estate business or some small operating businesses that have a limited liability company or a limited partnership, but we have heard from their CPAs, their certified public accountants, and their legal advisers about all the confusion and concern around these reporting requirements.
It does not help that many small businesses have no idea what FinCEN is, making them wary of submitting such sensitive data to a government agency with which they are not familiar. It is personally identifiable information, the most sensitive information we have: our name, our taxpayer ID number, and ownership of our companies.
That is why Congressman Nunn's bill provides a 1-year extension of the reporting deadline, which will allow FinCEN to address gaps in its nationwide education campaign and tailor its outreach to small business owners.
This extension ensures that all small business owners that qualify and are required, as beneficial owners, to report have adequate time to try to complete their reporting requirements, while here in Congress we continue to fight back against this particular rule and its structure. Otherwise, Mr. Speaker, these small business owners face aggressive penalties if they fail to report, even if it is unintentional.
Small businesses in this country are the backbone of our economy. I hear that said many times every week on this House floor. If that is true, we ought to be working together to get relief for them from this onerous rule. I commend Mr. Nunn for offering relief with this particular legislation.
I want to highlight the work of my Republican colleagues for their cosponsorship of this critical legislation and thank my friends on the other side of the aisle, the gentlewoman from Kansas (Ms. Davids) and the gentleman from North Carolina (Mr. Davis), for signing on to H.R. 736. I hope they will help us get this legislation over the finish line to benefit America's small businesses, even if it is in a moment of reprieve from the avalanche of rules.
Mr. Speaker, I urge all of my colleagues to join me in supporting Mr. Nunn's bill, H.R.
Mr. Speaker, I think it is important that you note the comment made by Mr. Meuser on the subject of 20 employees or $5 million. The definition of this bill says that a small business that has to report, these 32-plus million businesses that we are talking about, the definition is that they have fewer than 20 employees and fewer than $5 million.
My friend from California rightfully said that the concern of the Federal Government is about illicit finance through the use of shell companies incorporated in one of our States. Let that sink in for everybody listening to this debate: $5 million in revenues, 20 employees.
Mr. Speaker, for decades, before I came to Congress a few years ago, I helped start businesses and helped finance businesses, all of which would dream to have $5 million in annual revenues and 20 employees.
Think about your best friend who has an HVAC contracting company to help people with their air-conditioning and heating. He works there. His son works for him. They have a couple of million dollars in revenue. It is his whole livelihood. He loves it. He is the best at what he does, but in this world, in this House, he is accused of being a shell company and is being burdened by this rule.
Once again, so many times the government goes after the bad guy and sweeps up everybody. That is why Mr. Nunn has come to this floor to say that we need another year to think about this. I would certainly urge the incoming administration to rethink the whole process because Mr. Vargas is right: It is an important thing to do, to try to capture illicit finance, but it is another thing in the world to sweep up every American trying to live the American Dream with their own small business.
We want people who want $5 million in revenue and have 20 employees. What a joy.
We are united on this today, Mr. Speaker, and I think that is good for the American people to see, too, that we care about what is happening. Occasionally, we get it wrong in government, and we work hard to try to rectify it. That is what Zach Nunn of Iowa is fighting for small businesses to do.
Mr. Speaker, we have had a good, robust debate on the importance of the right tools for the Treasury, for our States, and for our law enforcement to root out illicit finance.
Today, the Corporate Transparency Act, I think, has been exposed for what it is, which is a tremendous overreach in that effort that has added complexity, financial burden, and confusion for our small businesses.
There is a better way to go about this, and I hope we can work together on both sides of the aisle and with the Treasury Department in the coming months to find that better solution, that least-costly solution, that solution that protects people's privacy, that protects personally identifiable information contained in these filings, and that does it in a way that is less intrusive and less costly.
The concern I have about these big databases, Mr. Speaker, is intrusion from China, Iran, Russia, and North Korea, our adversaries that every day are trying to break into the systems of the Federal Government and our private sector of this country to gather this personally identifiable information.
We have talked about it on this House floor, Mr. Speaker: IRS, hacked; Office of Personnel Management, hacked; the CFPB, the Consumer Financial Protection Bureau databases, hacked; others, hacked; private sector, hacked. This is just another giant database that puts people's data at risk.
Not only do I think there is a better way to do it, a less costly way to do it, and a more effective way to do it, but also a way to do it that protects people's privacy.
I thank Mr. Nunn for working on both sides of the aisle to craft a way. Let's take a new look, and let's do that by approving this bill overwhelmingly, encouraging the Senate to do the same so that we protect these small businesses in the interim, over the next year, from this horrendous cost and confusion by rising in strong support today on both sides of the aisle and passing H.R. 736.
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Mr. HILL of Arkansas. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
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