The Arizona members of the U.S. House of Representatives split down party lines in supporting or opposing HR 2513, also known as the “Corporate Transparency Act."
Supporters of the bill, which was introduced by Rep. Carolyn Maloney (D-N.Y.), say the legislation is needed to catch criminals and combat money laundering. But opponents say it will actually create needless bureaucratic red tape and place an enormous burden on small business.
Arizona's Democratic representatives Tom O’Halleran (1st District), Ann Kirkpatrick (2nd District), Raul Grijalva (34d District), Ruben Gallego (7th District) and Greg Stanton (9th District) voted in favor of the bill’s passage. Voting in opposition were Republican lawmakers Paul Gosar (4th District), Andy Biggs (5th District), David Schweikert (6th District) and Debbie Lesko (8th District)
The National Federation of Independent Businesses opposes the proposed law, which passed the House in October and is currently in the Senate Committee on Banking, Housing and Urban Affairs. Writing for its membership, Michael Chow with the NFIB Research Center analyzed the bill and estimated its impact on legitimate small businesses.
“An obvious concern is the increased risk that personally identifiable information of business owners may be abused or hacked by actors with malicious intent,” Chow wrote. He further estimated small business owners would have to spend an additional 13.2 million hours completing paperwork over a 10-year period to comply with the measure’s mandates, adding $537 million in costs.
Also in opposition is the National Association of Criminal Defense Lawyers and the American Civil Liberties Union. The organizations jointly wrote a letter to the Committee on Financial Services that said the measure, as currently written, is “Unnecessary, unwise and fundamentally unjust.” The letter sent to Congress states the law “could result in the conviction of individuals who have no intent to violate the law, whose greatest offense may simply be not understanding complicated and vague financial rules.” The law also creates serious privacy concerns for business owners, the organizations write, while doing little to actually target criminals.
The law seeks to close loopholes surrounding the use of anonymous shell companies. Criminals have been known to use these companies to launder money. The bill would require all companies to disclose their true owners at the time the company is formed.
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