America Outdoors Association
America Outdoors Association

January 14, 2013

AOA 2013
in Albuquerque
New Mexico
December 10 -13

America Outdoors Association Bulletin

What’s on the Agenda in 2013 that May Impact Your Business?

IRS and Department of Labor Are Ramping up Audits and Enforcement of the Misclassification of Workers as Independent Contractors.

For Outfitters Operating on Public Lands -- A Full Plate of Policy Issues

Seasonal Workers Must be Included in Calculating the Number of Full-time Employees for Health Care Reform

Governor Cuomo Floats Idea for Whitewater Competition among State Legislators and Employees

NPS Announces Call for Award Nominations

What’s on the Agenda in 2013 that May Impact Your Business?

If you operate an outfitting and guiding business, you’ll need to stay tuned to our bulletins and newsletters to keep up with the changes in regulations that will impact everyone’s business in some way.  You don’t have to operate in National Parks or National Forests to be impacted by the inevitable push to reduce the federal budget deficit, which is currently running around $1.3 trillion for FY 2013.

Here are some of the issues you’ll be hearing about from Congress and the Administration.  Don’t worry, be happy!

  • Proposed increase in the federal gas tax by .15 cents.  Both parties are supporting this tax increase since the Highway Trust Fund is going broke.  It would be phased in over three years if it passes.
  • Three big fiscal issues will be decided in the next two or three months, all of which could have some impact on your business: the debt ceiling, automatic federal spending cuts known as sequestration, and a budget resolution.  Congress is required by the Constitution to authorize the Administration to increase the country’s borrowing limit, which is now set at $16.4 trillion and was technically hit on December 31, 2012.  A government shutdown will interrupt many nonessential government services and likely lead to a closure of National Parks and possibly other federal lands.  Given the outrage that would erupt, a shutdown is unlikely. However, waiting until the last minute to work out a deal may leave some businesses which depend on access to a federal facility or service on edge.
  • Some National Parks and public land closures could result from sequestration or budget cuts.  Beyond the debt-ceiling debate, the White House made it clear in a meeting with various business and community leaders that National Parks (and other public lands) would not be spared from the axe during deficit reduction. These are not likely to be marquee Parks or Forests, but smaller units and some historical sites.
  • Selling off some public lands.  Cities and counties out West experiencing dramatic population growth are bumping up against public land boundaries.  Some in Congress are proposing to sell off some of the federal government’s vast holdings to help offset the deficit.  Energy rich lands may be among the candidate holdings since states would reap a bonanza from royalties for energy production.  This proposal will create a lot of controversy but will probably not go anywhere as long as there is divided government. Some sale of “surplus lands” near urban areas have already occurred for water treatment facilities and similar projects. Those smaller scale initiatives are likely to continue.  The more this agenda is pushed, the more likely the President will use it as a justification to designate public lands as Monuments.
  • Federal Motor Carrier Safety Administration (FMCSA) Issues.  29 rule-makings in 27 months are expected.  Not all the new rules will impact outfitters, but the pressure to jack-up regulations will continue.  As of October 1, the FMCSA began implementing fines of $25,000 for companies carrying passengers across state lines without a Motor Carrier Authorization. There is still a lot of confusion about who needs a Motor Carrier Authorization (MC operating authority). Information on the FMCSA website has been inconsistent with regard to 15 passenger vans used by outfitters where the compensation is indirect.  AOA is working with members of Congress to resolve this issue and make the regulations more appropriate for seasonal businesses. Meanwhile, any outfitter using 15 passenger vans should check with their state DOT and call the AOA office if they have questions.  Regulations vary from state to state, so your state DOT is probably the best source, although some state inspectors have misinterpreted federal standards.
  • Unlimited FDIC insurance for non-interest bearing accounts ended on December 31, 2012.  If you hold more than $250,000 in a bank among all your accounts, you’ll need to check on moving some money to another bank or using the CEDARS program to insure your holdings.  Here’s the notice from the FDIC website:  As scheduled, the unlimited insurance coverage for noninterest-bearing transaction accounts provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act expired on December 31, 2012.  Deposits held in noninterest-bearing transaction account are now aggregated with any interest-bearing deposits the owner may hold in the same ownership category, and the combined total insured up to at least $250,000.

IRS and Department of Labor (DOL) Are Ramping up Audits and Enforcement of the Misclassification of Workers as Independent Contractors. 

States began ramping up enforcement last year with a push from DOL.  Fines are expected to be increased in 2013 for violators.  DOL is said to be focusing on the hospitality industry for wage and hour enforcement actions where tips are part of the compensation package. 

From the U.S. Department of Labor’s website:
In September 2011, Secretary of Labor Hilda L. Solis announced a major step forward with the signing of a Memorandum of Understanding (MOU) between the Department and the Internal Revenue Service (IRS). Under this agreement, the agencies will work together and share information to reduce the incidence of misclassification of employees, to help reduce the tax gap, and to improve compliance with federal labor laws.

Additionally, labor commissioners and other agency leaders representing thirteen states have signed MOUs with the Department’s Wage and Hour Division, and in some cases, with its Employee Benefits Security Administration (EBSA), Occupational Safety and Health Administration (OSHA), Office of Federal Contract Compliance Programs (OFCCP), and the Office of the Solicitor. (See interactive map of participating states). The Department is actively pursuing MOUs with additional states as well.

As of January 2013, state’s signing the MOU with the DOL and other agencies are Colorado, Montana, Massachusetts, Connecticut, Maryland, Illinois, Missouri, Louisiana, Illinois, Wisconsin, Utah, Washington, California and Hawaii.

For Outfitters Operating on Public Lands -- A Full Plate of Policy Issues.

  • Forest Service cost recovery authority expired in 2012 but the agency is appealing to Congress to renew it through the FY 2013 Interior Appropriations bill.  Agencies are operating on a continuing resolution until the end of March.  Expect more cost recovery for permit administration as strategies to diminish the budget deficit are implemented.
  • The Federal Lands Recreation Enhancement Act expires in 2014.  Hearings and legislative language are expected at some point this year.
  • NEPA costs to authorize activities on public lands, including outfitter and guide permits, may be examined.  We think process bloat and the budget deficit are convening to limit access to public lands.
  • Trail maintenance challenges mount as beetle kill and storms leave trails impassable in many areas with much of the burden for opening up trails falling on outfitters.  New strategies will need to be implemented and AOA is appealing to Congressional leaders to address those issues.
  • Recreation.gov and the President’s America’s Great Outdoors Initiative will be ramped up over the next 2 or 3 years. Outfitter payments are already being funneled through recreation.gov.

Seasonal Workers Must be Included in Calculating the Number of Full-time Employees for Health Care Reform.  For Most of You, Not to Worry.

While it doesn’t go into effect until 2014, you’ll need to start preparing in 2013 for full implementation of the Affordable Care Act (ACA). When the law takes full effect in 2014, seasonal businesses will have to count their part-time, seasonal workers to determine if they are over the 50 full-time equivalent (FTE) threshold which requires the business to buy employee health insurance or pay a fine for each employee over the number 30. A company has to have 50 full-time employees for 120 days per year, but the calculation for most companies near this threshold is going to require professional assistance, like a payroll or accounting firm. The fine for not providing coverage is based on a monthly, not annual basis, so it amounts to $167 per month for uncovered workers or $2,000 for the entire year for uncovered full-time employees, but the first 30 uncoverd full-time employees are exempted from the fine.  In some cases the penalty can be $3,000 per year. More guidance on this issue will be forthcoming from IRS. 

Many companies with seasonal employees will not be impacted if they do their homework because the IRS recently issued guidance on seasonal workers allowing a look back period of 12 months when calculating the number of FTE's. Forget trying to read this rule but here it is (http://www.irs.gov/pub/irs-drop/n-12-58.pdf) To be full-time the employee must work 30 hours per week on average for about 120 days per year (which is a little confusing, but that's the way they established the threshhold).  Even if you do not provide coverage to full-time employees, that employee will be required to buy insurance, and may use the state or federal-facilitated exchange to do so. This is a complex topic and not meant to be fully covered in this brief.  When the Affordable Care Act was written a lot of these issues were not fully vetted so they are being dealt with through notices and rules as the Act is implemented. 

Large employers with more than 250 W-2’s will have to start reporting the value of health care insurance benefits on 2013 W-2 forms.

Some states will have exchanges to help businesses and individuals buy health insurance.  So far 23 states have decided against setting up exchanges.  In those states individuals and small businesses using the Federal-facilitated Exchange will pay a “user fee” on top of their insurance premium which has been estimated to cost about $270 per family. However, the fee will be set by the costs required to set-up and operate the federal exchange. Since the Supreme Court gave state’s the authority to opt out of their own Exchanges, the Administration is scrambling to set up the federal facilitated exchange which will need to be operational by this Fall.  Many states, which decided to set up exchanges, received grant money to do so, therefore, the start-up costs were covered for many of them.

Tax credits for smaller employers.  To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Those employees must have average wages of less than $50,000 a year.  Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments.

On a positve note the growth of spending on health care remained at a historic low for the third year in a row.  According to the annual Report of National Health Expenditures, total U.S. health spending grew 3.9 percent in 2011. 
 
Governor Cuomo Floats Idea for Whitewater Competition in Upstate New York.

To highlight the natural wonders up of upstate New York Governor Cuomo has proposed a whitewater rafting competition, the Adirondack Challenge, which would garner international attention. The details are still a bit sketchy, but New York rafting outfitters are probably thrilled with the idea. Governor Cuomo even proposed a competition among government agencies and cities. He quipped that during the competition all employees would have to paddle since the competition was not government. The idea seemed to get a lot of positive remarks in the media from travel and tourism interest groups.

NPS Announces Call for Award Nominations

The NPS has issued its Fall/Winter Consolidated Call for DOI and NPS awards.  Several of these NPS/DOI awards are available to concessioners. These include the NPS and DOI Environmental Achievement Award and the DOI Partners in Conservation Award.  This Year the Commercial Services Program collaborated with the NPS Public Health Service to develop a new NPS Healthy Parks Healthy People (HP2) Award.  This award includes multiple topic areas including Healthy Foods. 

Awards descriptions and nomination procedures are described on our external web site as a News Item at http://concessions.nps.gov/news_call_for_nominations.htm.  NPS also sent an email out to all park concession specialists asking them to share the information with their concessioners.

This year those managing the nominations call have developed a system that requires nominations to be submitted through an internal NPS Sharepoint site.  Because this site is currently only available to NPS personnel, concessioners that would like to submit a package are asked to reach out to an NPS point of contact, preferably their park or regional contact to access the awards. This NPS point of contact can act as their sponsor, download the forms for the cocnessioner to complete,and then concur with and upload the completed nomination on their behalf.

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