[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2946 Introduced in Senate (IS)]
108th CONGRESS
2d Session
S. 2946
To promote small business growth, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 8, 2004
Mr. Bayh introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To promote small business growth, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Growth Act''.
SEC. 2. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following:
``SEC. 45G. EMPLOYEE HEALTH INSURANCE EXPENSES.
``(a) General Rule.--For purposes of section 38, in the case of a
qualified small employer, the employee health insurance expenses credit
determined under this section is an amount equal to the applicable
percentage of the amount paid by the taxpayer during the taxable year
for qualified employee health insurance expenses.
``(b) Applicable Percentage.--
``(1) In general.--For purposes of subsection (a), the
applicable percentage is--
``(A) 50 percent in the case of an employer with
less than 26 qualified employees,
``(B) 40 percent in the case of an employer with
more than 25 but less than 36 qualified employees,
``(C) 30 percent in the case of an employer with
more than 35 but less than 51 qualified employees,
``(D) 20 percent in the case of an employer with
more than 50 but less than 76 qualified employees, and
``(E) 10 percent in the case of an employer with
more than 75 but less than 101 qualified employees.
``(2) High contribution bonus.--With respect to any taxable
year during which a qualified small employer pays 100 percent
of qualified employee health insurance expenses for the
qualified employees of the small employer, the applicable
percentage otherwise determined for such taxable year under the
preceding paragraph shall be increased by 5 percentage points.
``(c) Per Employee Dollar Limitation.--The amount of qualified
employee health insurance expenses taken into account under subsection
(a) with respect to any qualified employee for any taxable year shall
not exceed the maximum employer contribution for self-only coverage or
family coverage (as applicable) determined under section 8906(a) of
title 5, United States Code, for the calendar year in which such
taxable year begins.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualified small employer.--
``(A) In general.--The term `qualified small
employer' means any small employer which--
``(i) provides eligibility for health
insurance coverage (after any waiting period
(as defined in section 9801(b)(4))) to all
qualified employees of the employer,
``(ii) pays at least 70 percent of the cost
of such coverage (60 percent in the case of
family coverage) for each qualified employee,
and
``(iii) in the case of a small employer
which is located in a State which has
established a health insurance purchasing pool
under section 3 of the Small Business Health
Care Act of 2003, joins such pool.
``(B) Transition rule for new plans.--
``(i) In general.--If a small employer (or
any predecessor) did not provide health
insurance coverage to the qualified employees
of the employer during the employer's
precompliance period, then subparagraph (A)
shall be applied to such employer for the first
5 taxable years following such period by
substituting `50 percent' for `70 percent' in
clause (ii) (or for `60 percent' in such
clause, in the case of family coverage).
``(ii) Precompliance periods.--For purposes
of clause (i), the precompliance periods are--
``(I) the period beginning with the
small employer's taxable year preceding
its first taxable year beginning after
the date of the enactment of this
section, and
``(II) the period beginning with
the small employer's taxable year
preceding the first taxable year for
which the employer meets the
requirement of subparagraph (A)(i).
An employer not in existence for any period
shall be treated in the same manner as an
employer which is in existence and not
providing coverage.
``(C) Small employer.--
``(i) In general.--For purposes of this
paragraph, the term `small employer' means,
with respect to any calendar year, any employer
if such employer employed an average of not
less than 2 and not more than 100 qualified
employees on business days during either of the 2 preceding calendar
years. For purposes of the preceding sentence, a preceding calendar
year may be taken into account only if the employer was in existence
throughout such year.
``(ii) Employers not in existence in
preceding year.--In the case of an employer
which was not in existence throughout the 1st
preceding calendar year, the determination
under clause (i) shall be based on the average
number of qualified employees that it is
reasonably expected such employer will employ
on business days in the current calendar year.
``(2) Qualified employee health insurance expenses.--
``(A) In general.--The term `qualified employee
health insurance expenses' means any amount paid by an
employer for health insurance coverage to the extent
such amount is attributable to coverage provided to any
employee while such employee is a qualified employee.
``(B) Exception for amounts paid under salary
reduction arrangements.--No amount paid or incurred for
health insurance coverage pursuant to a salary
reduction arrangement shall be taken into account under
subparagraph (A).
``(C) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by
section 9832(b)(1).
``(3) Qualified employee.--The term `qualified employee'
means an employee of an employer who, with respect to any
period, is not provided health insurance coverage under--
``(A) a health plan of the employee's spouse,
``(B) title XVIII, XIX, or XXI of the Social
Security Act,
``(C) chapter 17 of title 38, United States Code,
``(D) chapter 55 of title 10, United States Code,
``(E) chapter 89 of title 5, United States Code, or
``(F) any other provision of law.
``(4) Employee--The term `employee'--
``(A) means any individual, with respect to any
calendar year, who is reasonably expected to receive at
least $5,000 and not more than $100,000 of compensation
from the employer during such year,
``(B) does not include an employee within the
meaning of section 401(c)(1), and
``(C) includes a leased employee within the meaning
of section 414(n).
``(5) Compensation.--The term `compensation' means amounts
described in section 6051(a)(3).
``(e) Certain Rules Made Applicable.--For purposes of this section,
rules similar to the rules of section 52 shall apply.
``(f) Denial of Double Benefit.--No deduction or credit under any
other provision of this chapter shall be allowed with respect to
qualified employee health insurance expenses taken into account under
subsection (a).''.
(b) Credit To Be Part of General Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986 (relating to current year business
credit) is amended by striking ``plus'' at the end of paragraph (14),
by striking the period at the end of paragraph (15) and inserting ``,
plus'', and by adding at the end the following:
``(16) the employee health insurance expenses credit
determined under section 45G.''.
(c) No Carrybacks.--Subsection (d) of section 39 of the Internal
Revenue Code of 1986 (relating to carryback and carryforward of unused
credits) is amended by adding at the end the following:
``(11) No carryback of section 45g credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the employee health insurance
expenses credit determined under section 45G may be carried
back to a taxable year ending before the date of the enactment
of section 45G.''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``Sec. 45G. Employee health insurance
expenses.''.
(e) Employer Outreach.--The Internal Revenue Service shall, in
conjunction with the Small Business Administration, develop materials
and implement an educational program to ensure that business personnel
are aware of--
(1) the eligibility criteria for the tax credit provided
under section 45G of the Internal Revenue Code of 1986 (as
added by this section),
(2) the methods to be used in calculating such credit, and
(3) the documentation needed in order to claim such credit,
so that the maximum number of eligible businesses may claim the tax
credit.
(f) Health Insurance Purchasing Pools.--
(1) Matching funds for operation of pools.--
(A) In general.--In the case of a State or a unit
of local government that establishes a health insurance
purchasing pool, the Secretary of Health and Human
Services shall provide, from the funds allocated under
paragraph (2), a grant equal to the applicable
percentage of the administrative costs associated with
such pool.
(B) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage is--
(i) 75 percent for the initial year of the
grant;
(ii) 50 percent for year succeeding the
year to which clause (i) is applicable;
(iii) 25 percent for the year succeeding
the year to which clause (iii) is applicable;
and
(iv) zero thereafter.
(C) Special rule for local government purchasing
pools.--The Secretary of Health and Human Services
shall not provide a grant under this subsection to any
unit of a local government unless such unit of local
government submits to the Secretary a certificate from
the State in which such unit of local government is
located authorizing such grant.
(D) Health insurance purchasing pool.--For purposes
of this subsection, the term ``health insurance
purchasing pool'' means a purchasing pool for small
employers (as defined under section 45G of the Internal
Revenue Code of 1986) for the purpose of providing
health insurance coverage (as defined in such section)
to qualified employees (as defined in such section).
(2) Funding.--Out of the money in the Treasury of the
United States not otherwise appropriated, there are authorized
and appropriated such sums as are necessary to carry out this
subsection.
(g) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after the
date of the enactment of this Act.
SEC. 3. CREDIT FOR EMPLOYEE TRAINING EXPENSES OF SMALL BUSINESSES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business related
credits), as amended by this Act, is amended by adding at the end the
following new section:
``SEC. 45H. SMALL BUSINESS EMPLOYEE TRAINING EXPENSES.
``(a) In General.--
``(1) Allowance of credit.--For purposes of section 38, in
the case of an eligible small business employer, the small
business employee training credit determined under this section
for the taxable year is an amount equal to so much of the
qualified training expenses paid or incurred by the eligible
small business employer with respect to qualified employees as
exceeds the base amount.
``(2) Base amount.--For purposes of paragraph (1)--
``(A) In general.--The base amount is an amount
equal to the average amount of qualified training
expenses paid or incurred by the eligible small
business employer with respect to all qualified
employees for the 3 preceding taxable years.
``(B) Special rule for new businesses.--
``(i) Businesses with at least 1 taxable
year.--In the case of an eligible small
business employer which has at least 1 full
preceding taxable year but fewer than 3
preceding taxable years, the base amount shall
be the amount of qualified training expenses
paid or incurred by such employer with respect
to all qualified employees during the preceding
taxable year.
``(ii) Start-up year.--In the case of an
eligible small business employer which does not
have any full preceding taxable years, the base
amount shall be zero.
``(b) Limitations.--
``(1) Per employee limitation.--The amount of the credit
allowed under subsection (a) for any taxable year with respect
to any qualified employee shall not exceed $1,000 ($500 in the
case of an eligible small business to which subsection
(a)(2)(B)(ii) applies).
``(2) Number of employees.--Not more than 5 qualified
employees may be taken into account under subsection (a) for
any taxable year.
``(c) Eligible Small Business Employer.--
``(1) In general.--The term `eligible small business
employer' means, with respect to any calendar year, an employer
who employed an average of at least 2 but not more than 100
employees on business days during the preceding taxable year.
``(2) Exception.--Such term shall not include any employer
who is a physician or whose principal business is providing
legal, accounting, engineering, architectural, or similar
services.
``(d) Qualified Training Expenses.--For purposes of this section,
the term `qualified training expenses' means expenses paid or incurred
for the training of a qualified employee to a person who is an eligible
provider of training services within the meaning of section 122 of the
Workforce Investment Act of 1998.
``(e) Qualified Employee.--For purposes of this section, the term
`qualified employee' means an individual who has been employed by the
eligible small business employer on a full-time basis for at least 6
months and who is not any of the following:
``(1) A highly compensated employee (within the meaning of
section 414(q)).
``(2) A physician or a veterinarian.
``(3) An individual participating in an apprenticeship or a
specialty trade skills development program associated with a
specialty trade contractor as specified in subsector 238 of the
North American Industry Classification System (as in effect on
the date of the enactment of this section).''.
(b) Credit Made Part of General Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986, as amended by this Act, is amended
by striking ``plus'' at the end of paragraph (15), by striking the
period at the end of paragraph (16) and inserting ``, plus'', and by
adding at the end the following new paragraph:
``(17) the small business employee training credit
determined under section 45H(a).''.
(c) Limitation on Carry Back.--Section 39(d) of the Internal
Revenue Code of 1986, as amended by this Act, is amended by adding at
the end the following new paragraph:
``(12) No carryback of small business employee training
credit before date of enactment.--No portion of the unused
business credit for any taxable year which is attributable to
the small business employee training credit determined under
section 45H may be carried back to a taxable year beginning
before the date of the enactment of section 45H.''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986, as amended by this Act, is amended by adding at the end the
following new item:
``Sec. 45H. Small business employee training credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to expenditures incurred after December 31, 2005.
SEC. 4. ACCESS TO CAPITAL.
(a) General Business Loans.--There are authorized to be
appropriated for general business loans under section 7(a) of the Small
Business Act (15 U.S.C. 636(a))--
(1) for fiscal year 2005, $16,500,000,000;
(2) for fiscal year 2006, $17,000,000,000; and
(3) for fiscal year 2007 and each fiscal year thereafter,
the sum of--
(A) $17,000,000,000; and
(B) $17,000,000,000 multiplied by the cumulative
percentage change in the consumer price index (as
defined by section 1(f)(5) of the Internal Revenue Code
of 1986) between October 1, 2005, and October 1 of such
fiscal year, rounded to the nearest $1,000,000.
(b) Debenture Size.--Section 502(2) of the Small Business
Investment Act of 1958 (15 U.S.C. 696(2)) is amended to read as
follows:
``(2) Maximum amount.--Loans made by the Administration
under this section shall be limited to--
``(A) $1,000,000 for each small business concern if
the loan proceeds will not be directed toward a goal or
project described in subparagraph (B) or (C);
``(B) $1,300,000 for each small business concern if
the loan proceeds will be directed toward 1 or more of
the public policy goals described under section
501(d)(3); and
``(C) $4,000,000 for each small business concern if
the loan proceeds will be directed toward projects for
small manufacturers.''.
SEC. 5. 2-YEAR EXTENSION OF INCREASED EXPENSING FOR SMALL BUSINESS.
Subsections (b), (c), and (d) of section 179 of the Internal
Revenue Code of 1986 are each amended by striking ``2006'' each place
it appears and inserting ``2008''.
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