WASHINGTON, D.C. (October 8, 2013): The Minority Media and Telecommunications Council (“MMTC”) has worked for decades to establish legally defensible definitions of small businesses to facilitate the development and prosperity of private enterprises owned by African Americans, Latinos, Asians, women and other underrepresented groups in the American business community. Diversity in ownership, we believe, yields diversity in viewpoint, hiring, and economic development. Recent action by the Supreme Court in the area of affirmative action only underscores the importance of carefully crafting small business definitions in federal and state law to enhance small business ownership across all segments of American society while remaining true to the Constitution, as the Supreme Court interprets it.
The Marketplace Fairness Act (“MFA”), as passed by the Senate (S.743) includes a safe-harbor provision for small businesses, using out-of-state revenues to establish whether a business would be exempt from the bill’s compliance costs.
A recent report by former Clinton Administration economist Jon Orszag concludes that the small business definition in the MFA “is not supported by any available empirical evidence” and could “impose so-called transaction costs (or compliance costs) on some businesses – many of which may be owned by women, African Americans, Hispanics, Asian Americans, Native Americans/Alaskans, Hawaiian/Pacific Islanders, and veterans – which is economically inefficient.” Orszag recommends that any small business safe harbor in the MFA use existing small business definitions in federal law and existing Small Business Administration regulations, concluding that such a definition would be “less likely to harm” small minority- and women-owned businesses.
MMTC does not take a position on the merits of the MFA generally. MMTC is concerned, however, that a judicially untested and economically unsupported definition of small business risks harming minority-owned small businesses and could undermine efforts to maintain effective federal and state statutes and regulations in the courts.
MMTC therefore calls upon Congress to reconsider the definition of small business in the MFA’s safe harbor provision such that any final version of the bill would apply existing federal laws and Small Business Administration regulations to define small businesses.
The full report is available on the MMTC website, http://mmtconline.org.
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The Minority Media and Telecommunications Council (MMTC) is a national nonprofit organization dedicated to promoting and preserving equal opportunity and civil rights in the mass media, telecommunications and broadband industries, and closing the digital divide. MMTC is generally recognized as the nation’s leading advocate for minority advancement in communications.