WASHINGTON – The Senate Finance Committee today passed the bipartisan Startup Innovation Credit to allow startups to claim the popular Research and Development tax credit. The Finance Committee amendment, which aims to help jumpstart the economy by creating and growing new businesses and jobs, passed the Committee as part of a tax extenders legislative package. The Startup Innovation Credit is based on language included in the Startup Act 3.0, bipartisan legislation which was introduced by U.S. Sens. Jerry Moran (R-KS) and Mark R. Warner (D-VA).

 "I am very pleased to see the Senate Finance Committee approved a tax extenders package that includes Startup Act’s R&D tax credit for startup companies. Research shows that companies five years or younger create all net new jobs in the American economy,” Sen. Moran said. “We also know the recession had a major impact on the economy, dropping new business formation to a historically low level. Most startups do not earn a profit immediately after they launch, and therefore are limited from accessing R&D tax credits available to larger, profitable businesses. The proposal adopted by the Finance Committee offers startup companies that are not yet profitable a tool to expand without facing a greater tax liability, increasing the chances they can ultimately grow and hire more Americans. This credit is a central part of the bipartisan Startup Act 3.0, the leading pro-entrepreneur legislation in the U.S. Senate."

To qualify for the Startup Innovation Credit, a company must be less than five years old and have less than $5 million in gross receipts.  The benefit is capped at $250,000 per year.  Since many young companies invest heavily in research and development in their first few years but don’t yet have income tax liability, they are unable to claim federal income tax credits, including the R&D Tax Credit. In fact, according to a Government Accountability Office report, more than half of the credit claimed by companies each year goes to firms with $1 billion or more in receipts.

“Startups create about three million new jobs each year, but they face immense challenges getting their businesses off the ground,” Sen. Warner said. “I’m pleased that because of our bipartisan amendment, more startups may be able to access the immensely popular R&D tax credit. This will help make sure more startups in Virginia can spend more resources on creating jobs. I look forward to passing this legislation out of the full Senate, and I will continue working with Senator Moran and our cosponsors to pass Startup 3.0 as well.

Startup Act 3.0 is co-sponsored by Sens. Roy Blunt (R-MS), Chris Coons (D-DE), Amy Klobuchar (D-MN), Tim Kaine (D-VA) and Marco Rubio (R-FL).  It is based upon research showing that for close to three decades, companies less than five years old have created almost all of the net new jobs in America.

The Startup Innovation Credit was cosponsored by Sens. Warner, Pat Roberts (R-KS), Debbie Stabenow (D-MI), Maria Cantwell (D-WA), Chuck Schumer (D-NY) and Mike Enzi (R-WY).

WASHINGTON, D.C. – Today, U.S. Senator Jerry Moran (R-Kan.), Ranking Member on the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education and Related Agencies, met with Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner to discuss his ongoing concerns with the Medicare Recovery Audit Contractor (RAC) program.

“I have heard from so many Kansas hospitals and health care providers who are frustrated with the flawed RAC program,” Sen. Moran said. “They have been forced to divert significant resources away from caring for patients to appeal incorrect audit decisions that are ultimately overturned. I’ve raised several concerns about this program in letters to HHS, at Appropriations Committee hearings and through language included in the FY2014 Omnibus Appropriations bill, so I was pleased to visit with Administrator Tavenner today. We need to achieve a balance of safeguarding Medicare finances while avoiding costly burdens on hospitals and health care providers that are affecting their ability to care for patients.”

CMS is the division of the U.S. Department of Health and Human Services (HHS) responsible for administering Medicare and Medicaid. The RAC program focuses on post-payment reviews of Medicare claims from health care providers to prevent improper payments, but unfortunately flaws in the program are yielding incorrect audit results. This broken program is unreasonably burdening providers, and has created a two-year appeals backlog at HHS’ Office of Medicare Hearings and Appeals (OMHA). According to the HHS Inspector General, 56 percent of RAC appeals are reversed at OMHA, while several Kansas hospitals have appeal-win rates around 95 percent.

During the meeting, Administrator Tavenner and Sen. Moran discussed actions CMS is taking to improve the RAC program and the related backlog issues at OMHA. In particular, Administrator Tavenner said CMS will:

• Continue the current RAC moratorium on new reviews for 3-6 months to alleviate the current backlog;
• Withhold contingency fees from RACs until the second level of appeals levels are exhausted. This will allow health care providers continued use of the disputed funds to support ongoing business operations instead of having them frozen until cases are fully resolved;
• Establish a quality standard (90 percent accuracy rate) on appeals for RACs. If RACs do not meet this threshold, they will be subject to financial penalty;
• Require auditors to adjust their document requests based on the size of the provider and a provider’s denial of claims rate. Currently, RACs request documents from health care providers regardless of the resources available to the responding office or its track record of successful compliance with Medicare payment rules. This requirement will force RACs to limit their document requests based on the claim type and focus their efforts on bad actors;
• Allow a 30-day discussion period before claims are sent to Medicare Administrative Contractors for adjustment requiring auditors to acknowledge receipt within three days of such a request. Currently, RACs are required to stop further discussions upon notification of an appeal by the health care provider. This will allow providers an opportunity to fully discuss their claims with auditors before filing an appeal.

These initiatives are important initial steps toward improving the RAC program and alleviating the burden on health care providers. Additionally, HHS has established a working group to review the appeals process and offer recommendations to resolve the RAC and OMHA appeals backlog issues. Sen. Moran will follow-up on this issue at the FY2015 HHS hearing scheduled for May 7, 2014 with HHS Secretary Sebelius.

Sen. Moran and Administrator Tavenner also discussed Sen. Moran’s opposition to Obama Administration proposals that would cut reimbursements to Critical Access Hospitals (CAHs) and eliminate hospitals from the CAH program. Additionally, they visited about CMS’ cuts to Medicare reimbursement for home health care services, which are threatening many Kansas seniors’ access home health care. Home health care is a cost-effective alternative to other forms of care – especially in rural areas where patients tend to be more geographically dispersed.  Sen. Moran also expressed his objection to CMS’ unreasonable and inflexible physician supervision rules relating to the provision of outpatient therapeutic services. These regulations are making it difficult for many hospitals in Kansas and other rural states to provide these services to patients.  In February, the Senate passed S. 1954, legislation Sen. Moran introduced to prevent the federal government from enforcing these burdensome supervision regulations for CAHs and other small, rural hospitals in 2014. 

During his time in Congress, Sen. Moran has visited every community hospital in Kansas. The visits are extremely useful because they give him the opportunity to talk with Kansas health care providers and learn more about how they care for the residents of their communities.

Click here to read Sen. Moran’s Jan. 29, 2014 letter to HHS Secretary Sebelius stressing the importance of addressing the RAC program’s flaws.

Click here to read Sen. Moran’s Aug. 1, 2013, letter to HHS Secretary Sebelius asking for an update on HHS’ efforts to improve the RAC program.

###

WASHINGTON, D.C. – Today, U.S. Senators Jerry Moran (R-Kan.) and Pat Roberts (R-Kan.) reacted to the Federal Aviation Administration’s (FAA) announcement that they will commence a rulemaking process that could expand the number of pilots allowed to fly without obtaining a third-class medical certificate.

“Today’s announcement that the FAA is considering a commonsense rule change is good news for general aviation pilots in Kansas and across the country,” Sen. Moran said. “I encourage pilots to review this proposal and share feedback. I am hopeful an improved FAA rule will remove unnecessary hurdles for pilots trying to get off the ground, while preserving important safety standards in our nation’s skies.”

“I am pleased FAA has taken steps to review medical certification rules,” Sen. Roberts said. “I hope today’s action leads to a solution that will allow more pilots to fly recreationally and in a safe manner without having the burden of obtaining an unnecessary third-class medical requirement.”

Last month, Sens. Roberts and Moran, along with U.S. Senator John Boozman (R-Ark.), introduced the General Aviation Pilot Protection Act, S. 2103. The legislation would expand on the success of FAA’s 2004 Sport Pilot rule, which allows pilots to fly small, light aircraft without a third-class medical certificate, but requires them to undergo a biennial flight review by a certified flight instructor. During these flight reviews, instructors evaluate each pilot’s physical and cognitive condition, as well as his or her ability to safely operate an aircraft.

“For a decade, sport pilots have flown safely without third-class medical certificates, and we’re confident private pilots can do the same,” AOPA President Mark Baker said. “This issue is a top priority for AOPA members and we appreciate the FAA’s decision to move forward with rulemaking. We’re especially grateful to Reps. Rokita and Graves and Sens. Boozman, Roberts, and Moran for their leadership on medical certification reform. They understand the value of general aviation to the economy, the national transportation system, and the American way of life. And they recognize that expanding the third-class medical exemption will make it easier to get new pilots flying and keep experienced pilots safely in the air.”

S. 2103 is supported by the Aircraft Owners and Pilots Association (AOPA), Experimental Aircraft Association (EAA), General Aviation Manufacturers Association (GAMA) and the National Business Aviation Association (NBAA).

###

WASHINGTON, D.C. – Today, the first anniversary of the majority-rule adoption by the U.N. General Assembly of the United Nations’ Arms Trade Treaty (ATT), U.S. Senator Jerry Moran (R-Kan.) again expressed frustration with the administration’s decision to sign U.N. ATT, their failure to respond to the bipartisan letter he led last fall, and their new efforts to implement the treaty without first obtaining the advice and consent of the Senate.

Sen. Moran leads the bipartisan opposition of at least 50 U.S. Senators to the U.N. ATT in the Senate. On numerous occasions, the group has expressed to President Obama that the Senate opposes ratification and will not be bound by its obligations including:

• In May 2012, Sen. Moran spoke on the U.S. Senate Floor about S. 2205, the Second Amendment Sovereignty Act, which he introduced to prohibit funding to negotiate a U.N. ATT that restricts the Second Amendment rights of U.S. citizens;
• In July 2012, Sen. Moran drafted a letter signed by 50 of his Senate colleagues and wrote an op-ed notifying the Administration that there was strong enough opposition to block the ATT from Senate passage;
• In March 2013, Sen. Moran introduced S. Con. Res. 7, a concurrent resolution sponsored by 35 of his Senate colleagues, which outlines specific criteria that must be met for U.N. ATT to be ratified by the U.S. Senate and recognized as customary international law. S. Con. Res. 7 has been endorsed by the National Rifle Association, Heritage Action, and the Endowment for Middle East Truth; and
• In October 2013, Sen. Moran led a bipartisan group of 50 U.S. Senators, including Senators Joe Manchin (D-W.V.) and Jim Inhofe (R-Okla.), in reiterating to President Obama that the Senate overwhelmingly opposes ratification and will not be bound by its obligations.

Click here to view the letter to the president, or find the full text below:

April 2, 2014

President Barack Obama
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear President Obama:

On the first anniversary of the majority-rule adoption by the U.N. General Assembly of the United Nations’ Arms Trade Treaty, I write to express my continued concern and regret at your decision to sign the treaty, at your failure to respond to the bipartisan letter which I led last fall, and at your efforts to implement the treaty without first obtaining the advice and consent of the Senate.

On October 15, 2013, 50 members of the Senate delivered a letter to you pledging to oppose ratification of the treaty, and giving notice that we do not regard the U.S. as bound to uphold its object as purpose. In that letter, we set out six substantive concerns for this position, and invited your response.

Though Assistant Secretary of State Tom Countryman stated in November that the administration is “ready to discuss [the treaty] with people who don’t agree with us...and have offered to do so...repeatedly with very little response,” we have not received even the courtesy of an acknowledgement.

I must conclude from this fact that your administration is not interested in responding substantively to the concerns we have raised. Particularly in view of our constitutional responsibility for providing advice and consent on treaties, and of your proclaimed intention to rely on executive actions to achieve your policy objectives, I find this troubling.

Since October, both the Senate and the House of Representatives have made it clear that they oppose the implementation of the treaty until it passes through the full ratification process, including the passage of implementing legislation. The House sent a parallel letter in October, and, in December, you signed into law the 2014 National Defense Authorization Act, which contains a provision prohibiting the Department of Defense from expending any funding to implement the treaty prior to its full ratification.

The views of the Senate having been made clear, I was concerned when your administration announced a new conventional arms export control policy on January 15. While Assistant Secretary Countryman stated in November that “becoming a party to the treaty would not require any additional export or import controls for the United States, full stop,” the new policy, announced only two months later, bears a strong similarity to the criteria and standards in the treaty.

I therefore regard this new policy as an effort on the part of your administration to implement the treaty without obtaining the advice and consent of the Senate. I do not regard this policy as required by the treaty’s object and purpose: I view it as a voluntary effort to implement the treaty. I am disturbed both by the secrecy of the process that produced this new policy and the disregard it shows for the role of the Senate, in particular. I therefore call upon you to withdraw this policy and to consult fully with relevant committees and concerned offices as you revise it.

Finally, I note with regret the recent passing of Ambassador (retired) Donald A. Mahley, Special Negotiator on Nonproliferation, who served on the U.S. delegation to the U.N. that negotiated the Arms Trade Treaty. While we differ on the merits of the treaty, I am sure that you join us in expressing our condolences to his widow, Julianna Mahley, at the death of this tough-minded and plain-speaking servant of the nation in war and peace.

As in October, I urge you to notify the treaty depository that the U.S. does not intend to ratify the Arms Trade Treaty, and is therefore not bound by its obligations. I pledge to continue leading my colleagues in opposing the ratification of this treaty, and wish to repeat our previous notice that we do not regard the U.S. as bound to uphold its object and purpose. Lastly, I now urge you to end any and all efforts to implement the treaty before it passes completely through the entire U.S. ratification process, and thereby to show the respect for the constitutional processes that you are sworn to uphold.

I appreciate your consideration on this issue and look forward to your response.
 

                                                                        Sincerely,

                                                                        Jerry Moran
U.S. Senator