Fast forward

Entrepreneur, Jan, 1999 by Stephen Barlas

It's a new year for small business. We asked the SBA's Jere Glover for a glimpse of what's to come.

If small business has a champion, Jere W. Glover is it. The SBA's chief counsel for advocacy since May 1994, Glover roams the federal bureaucracy like a free safety in football, looking for regulatory actions that pose potential problems for small business. His territory includes Congress, where he frequently testifies as the voice of the "little guy," who may or may not be represented by any of the small-business trade associations whose representatives tread the halls of the Capitol.

That role was never more evident than last year, when Glover was a lone voice speaking on behalf of entrepreneurs who would have been hurt by a now-defunct bankruptcy bill supported by all the major small-business groups. Here, we speak with Glover about what 1999 has in store for small business:

Entrepreneur: Will the IRS reform bill Congress passed last year have much of an impact on small businesses in 19997

Jere W. Glover: The new IRS commissioner [Charles O. Rossotti] is restructuring the IRS so that in each office, there will be agents who do nothing but work with small businesses. Also, the new IRS law establishes a taxpayer advocate. In the past, there was really nothing you could do to fight the IRS, short of spending $50,000 in tax court. That's not an option for most small businesses.

Entrepreneur: The Small Business Regulatory Enforcement Fairness Act (SBREFA) was thought to be a big deal when it passed in 1996. Do you think the bill has lived up to its promise?

Glover: SBREFA was a watershed change. It played a role in Northwest Mining Association v. Babbitt. In that case, which was decided last year, a federal district court in Washington, DC, agreed with small mining companies and my office that the Department of Interior's Bureau of Land Management had used improper size standards in defining small businesses and therefore had underestimated the effect of its rule on small business. Because of SBREFA, agencies like the EPA and OSHA are talking with small businesses well before the stage at which a rule is proposed. The court throwing out regulations is the ultimate proof there's been a change.

Entrepreneur: What about the legislative debate over whether there should be federal requirements on managed-care health plans? Many small-business groups argue that federal mandates would increase their health-insurance

Glover: Perhaps some of the legislation we see goes too far. But knee-jerk opposition to some of the basic patient rights principles is wrong, too. Patients' rights are important; the right to file lawsuits may be less important, and that's where the cost is really driven up. Making an HMO give you a second opinion is not that costly. But I think you'll see a lot of small-business people whose employees or families have been abused by an HMO thinking we need to do more than we have done [to help patients who are also employees of small businesses].

Entrepreneur: Are there some emerging regulatory or legislative issues that entrepreneurs should pay close attention to?

Glover: Mergers are going to be an ongoing concern. One of the things we think is happening is that the firms that can't get equity capital to grow their businesses are selling out. And they're selling out at much smaller sizes, 10 and 15 employees, than anybody ever thought, which means fewer small businesses.

Also, now that federal regulatory agencies are more sensitive to small-business concerns, we need to work with state and local regulatory agencies. The states need to become more flexible in their regulatory approaches and enforcement activities. I will tell you we're beginning that effort, but I won't tell you we've made any real inroads yet. We're looking for models of excellence in the states, and we plan to award innovative programs at our state conference [to be held December 1998].

Stephen Barlas is a freelance business reporter who covers the Washington beat for 15 magazines.