SmallBiz Vote

What’s in the Senate’s latest small business bill for you

The SUCCESS Act has some rare bipartisan support in the Senate.

Just before Congress departed for summer recess last week, Senator Mary Landrieu (D-La.), introduced legislation designed to spur small business job growth and boost entrepreneurship.

Her so-called SUCCESS Act of 2012, cosponsored by seven other Democrats, is notable because, when it was previously introduced as an amendment to the Small Business Jobs and Tax Relief Act (which remains on the Senate calendar), it got support from five Republicans to achieve 57 votes in the Senate—close to the 60 needed to invoke cloture and get to a vote. Landrieu, who chairs the Senate Committee on Small Business and Entrepreneurship, called even that small bit of bipartisanship a "monumental feat in today's political climate."

She said in a statement that the bill "is made up of numerous bipartisan provisions" offered by members of her committee to "get our small businesses the assistance they need to grow our economy."

So what's in the SUCCESS Act? The bill is a mashup of measures from 14 other existing pieces of small business legislation. It includes language addressing taxes, access to capital, access to global markets, mentoring, government contracting, and "transparency, accountability, and effectiveness."

Extensions of small business tax cuts included in the bill would, according to a report from the Congressional Joint Committee on Taxation, translate to $12 billion in tax savings for small businesses in 2012 and 2013.

Among 19 specific measures, the bill would:

  • Extend through December 2013 the 100% capital gains tax exclusion on qualifying investments in small business stock.
  • Double the $5,000 business startup expenditure deduction that expired in 2010. In 2012 and 2013 the deduction would be $10,000, subject to a $60,000 threshold.
  • Temporarily reduce from 10 years to 5 the period an S-Corporation is required to hold onto its assets after converting from a C-corporation to avoid a tax on built-in gains at time of conversion.
  • Allow sole proprietorships, partnerships, and non-publicly traded corporations with less than $50 million in average gross annual receipts for the prior 3 years to carry back general business credits from 2012 and 2013 to offset five years of taxes to increase cash-flow for businesses that are currently not realizing profits.
  • Extend through December 31, 2013, the Sec. 179 tax expensing provision that allows small businesses to immediately, instead of over time through depreciation, write-off up to $500, 000 (up from $250,000) for tangible personal property and up to $250,000 for improvements to qualified real property including improvements to retail and restaurant property, subject to an increased $2,000,000 threshold.
  • Modify the Small Business Investment Company program to raise the amount of SBIC debt the SBA can guarantee from $3 billion to $4 billion, and increase from $225 million to $350 million the amount of SBA guaranteed debt a team of SBIC fund managers who operate several funds can borrow.
  • Extend for one year a provision set to expire on September 27, 2012, which allows small business owners to use SBA 504 long-term, fixed-rate loans to refinance existing commercial mortgages.
  • Improve government-wide small business export promotion and increases state events targeted at small businesses.
  • Require SBA to post online information by city/state on 7(a) and 504 loan activities by lenders and include quarterly reports on loans made by program so potential borrowers can see which banks are lending in their communities.
  • Reauthorize the Women's Business Center program through FY15 and make improvements to the program, including a GAO review of program performance as compared with other SBA economic development programs.

The bill, which Landrieu introduced on July 25, has been referred to the Senate Finance Committee for review after Congress reconvenes on September 10. While a "monumental feat" of bipartisan support could see the bill passed by the Senate, it would take a small miracle to get it passed by the House.

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