Text and Summary of the Small Business Jobs Act

Please see information on the Small Business Jobs Act.

Small Business California has been asked to comment on this bill. Caroline Bruckner in Senator Landrieu’s office is looking for your comments and support (Caroline_Bruckner@sbc.senate.gov).

Note one of the provisions is to allow full deductions for the self employed purchasing health insurance. We have worked on that for years and Senator Landrieu has always been there for us.

I have received a call from Caroline advising that she may not be able to respond to your email but know she appreciates it.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188



For Immediate Release
June 29, 2010


BAUCUS, LANDRIEU UNVEIL BILL TO CREATE JOBS
AND HELP SMALL BUSINESSES GROW

Finance and Small Business Chairs Release Small Business Jobs Act

Washington, DC - Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu (D-La.) today released the Small Business Jobs Act, a bill to help small businesses access capital, stimulate investment in small businesses and promote entrepreneurship - all of which will help small business create jobs.

"Small businesses are the engine of our economy and need to be a critical focus of our job-creation efforts. Helping small businesses helps get Americans back to work," said Baucus. "Working together, we crafted our bill to promote entrepreneurship and investment in small businesses and provide small businesses with the vital access to capital they need to create jobs."

"Every day, headline after headline goes to big business layoffs and losses, but in reality it is the small businesses and their employees that are bearing the brunt of this crisis," said Landrieu. "Since the start of the economic downturn, 80 percent of the country's job losses came from small businesses. It is time to turn our attention to the small businesses and entrepreneurs to get Americans back to work. By providing some cost-effective and commonsense changes to lending, contracting and technical assistance programs, we can build on successful programs implemented in the Recovery Act to help small businesses keep their doors open. Ranking Member Snowe and I have crafted this package to include provisions that we have both advocated for, and I am very pleased with the finished product. As we finalize our package, I look forward to working with my colleagues on both sides of the aisle, as well as the other committees, to ensure the swift passage of this legislation."

The Small Business Jobs Act will:

Help Small Businesses Access Capital

· The legislation encourages investment in small businesses by allowing investors to exclude the gains from the sale of certain small business stock from their income for tax purposes if the stock is held for more than five years. This policy helps small business owners access more private capital to finance an expansion and hire new workers.

· The legislation reduces the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years. Small businesses will also be able to count the general business credits against the Alternative Minimum Tax (AMT), freeing up capital for expansion and job growth.

The legislation establishes a Small Business Lending Fund of $30 billion to provide capital investments to small community banks to increase small business lending. The fund is limited to only the smallest banks, those who hold less than $10 billion in assets, and the performance-based program would incentivize only those lenders that extend new credit by decreasing the dividend rate banks pay as they increase lending.

The legislation establishes the State Small Business Credit Initiative to provide $900 million in grants to existing successful state small business programs that help private lenders extend more credit to small businesses.

The legislation raises the cap on small business loans to increase lending by $5 billion in the first year after enactment, and refinances commercial real estate debt into long-term, fixed-rate loans, provisions that are expected to be budget neutral and could create or save 200,000 jobs.

Building on successful initiatives we put in place through the Recovery Act, by making simple and cost-effective changes to the SBA's two largest lending programs and to its microloan program, we were able to pump more than $20 billion into more than 40,000 businesses in our economy. This legislation calls for an extension of these lending provisions through December 31, 2010.

Increase Small Businesses' Ability to Make Investments

· The legislation allows taxpayers to write off more of the cost of purchases for their business, such as equipment and machinery, in the year the purchase is made. The legislation also expands the types of purchases that would qualify for special expensing to include some types of real property, such as leasehold, retail and restaurant improvements. When small businesses are able to deduct the cost of purchases more quickly, they have more cash on hand to create jobs.

Promote Entrepreneurship

· The legislation doubles the amount of start-up expenditures that may be deducted by someone starting a small business, making it easier for new businesses to open.

· The legislation increases resources to support the Office of the United States Trade Representative's small business export promotion and trade enforcement activities. These efforts help U.S. small business exports grow in foreign markets and ensure small businesses compete on a level playing field.

· The legislation allows self-employed individuals to deduct health insurance costs for purposes of paying the self-employment tax.

The legislation improves the Small Business Administration's (SBA) trade and export finance programs, elevates the Office of International Trade within the SBA and adds export finance specialists to the SBA's counseling programs.

The legislation establishes the State Export Promotion Grant Program (STEP), which would increase the number of small businesses that export.

The legislation allows the SBA to waive or reduce the state-matching share of its funding requirement for up to one year to continue providing technical assistance to underserved communities to start and grow small businesses.

Promote Equity

· The legislation promotes tax fairness by preventing small businesses from incurring large tax penalties aimed at large corporations and wealthy individuals investing in tax shelters.

The legislation removes the red tape and closes loopholes that too often put government work into the hands of multinational corporations, instead of Main Street businesses.

The legislation makes clear that no single contracting program receives priority over another program when competing for federal contracts.

The legislation is fully paid for, closes unintended tax loopholes and reduces the tax gap.

Grandfathered Health Plans

On June 14 regulations were put forth explaining how health plans can be grandfathered. It appears that the regulations as written will mean very few businesses will be able to keep their current health plans. My personal comment is that this is very disappointing.

Plans in effect on March 23, 2010 and plans maintained pursuant to one or more collective bargaining agreements ratified before March 23, 2010, are “grandfathered” in certain respects.

For individuals and small business, who are more likely to significantly change the plan design (such as increase out of pocket expense or copayments) and/or change carriers, will lose their “grandfathered” status.

In order for a plan to not lose “grandfathered” status, it cannot do any of the things below:

Cannot Significantly Cut or Reduce Benefits.

Cannot Raise Co-Insurance Charges.

Cannot Significantly Raise Co-Payment Charges.

Cannot Significantly Raise Deductibles.

Cannot Significantly Lower Employer Contributions.

Cannot Add or Tighten an Annual Limit on What the Insurer Pays.

Cannot Change Insurance Companies.

There will be thousands of regulations written in the coming years and many will define what the health bill really is.


Scott Hauge
President
Small Business California
2311 Taravel Street
San Francisco, CA 94116
415-680-2188
shauge@cal-insure.com

Doug Urbick's Comments

Five and a half years ago I founded Small Business California. My goal was to give small businesses a voice in Sacramento. A couple of weeks ago we presented our sales tax bill SB 1373 to the Revenue and Taxation Committee.

Testifying for our bill was Doug Ubrick from Hazard Construction. Chairman Wolk asked if this issue had ever come up before the legislature. Here is Doug’s answer

Question from Chairwoman Wolk:

A) Has there been prior legislation proposed on this and if not, why not?

To the best of our knowledge, there has not. The truth is that paving contractors are a fairly disjointed and unsophisticated group. The trade associations like the AGC (Associated General Contractors) tend to be lead by the larger more sophisticated contractors, included many of those who are vertically integrated. Trying to ‘change laws’ is just something that seems way beyond the grasp of the normal paving contractor. Small Business California has brought the ‘know-how’ to this group to finally address this inequity.

While these are paving contractors we have done the same thing in one way or the other for all of small businesses around the state. If you are not a member please consider joining.

You can do so by going to www.smallbusinesscalifornia.org

I am frequently asked if small businesses are using social marketing. Quite frankly in my business I have not done so.

Are you? Do you use Facebook, You Tube, Twitter or Yelp to market your business? Does it help you? If you use any of these what advice would you give to other businesses in how to effectively use these social marketing vehicles?


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

Support SB 1373/ 1099s

On Wednesday Small Business California sponsored bill SB 1373 will be coming before the Senate Revenue and Tax committee.

This bill will level the playing field between paving contractors and vertically integrated manufactuers/ contractors. Currently vertically integrated manufacturers/ contractors pay a sales tax based on the cost of materials that go into products like asphalt and paving contractors pay a sales tax based on the cost of the final product. This gives the vertically integrated manufacturer/contractor a 4% to 5% bid advantage.

Most of the paving contractors are small businesses and the vertically integrated manufacturers/ contractors are for the most part big business. We have seen many cases where these paving contractors have lost bids due to the sales tax advantage.

Many of you have sent emails to Senator Leno, author of 1373, supporting his legislation. Please see below members of the members of the Revenue and Tax Committee. If you are in one of the committee members district please send an email supporting SB1373. I know this probably doesn’t impact you directly but we need to show small business solidarity.

Lois Wolk (Sacramento, San Joaquin, Solano, Yolo), Chair: Senator.Wolk@senate.ca.gov

Mimi Walters (Orange, Tustin, Laguna Niguel, Laguna Hills) Vice Chair: Senator.Walters@sen.ca.gov

Elaine Alquist (Santa Clara): Senator.Alquist@sen.ca.gov

Roy Ashburn: (Bakersfield): Senator.Asburn@sen.ca.gov

Alex Padilla: (Los Angeles) Senator.Padilla@sen.ca.gov

Last week Harry Moos represented Small Business California and the Plumbing Heating and Cooling Contractors of California at a Dan Lungren press conference supporting Congressman Lungrens HR 5141.

As you have read here before the recently passed health bill had a provision that would require businesses to file 1099s on all businesses that you pay$600 or more to. Currently you only need to file 1099s for businesses that provide you services and who are not incorporated. What this means for my business, CAL Insurance, is that I currently file 25 1099s. Under the new law I will have to file about 700.

HR 5141 will repeal this requirement. Currently there are 70 cosigners on this bill. All are Republicans. The Democrats many of which recognize the burden this places on small business are not supporting this because the Congessional Budget Office has said this requirement will raise $17 billion over 10 years.

Write your Congressman and ask them to support HR5141.

One final comment. I don’t want anyone to think my above comments are a slap at Democrats. There is another bill HR 4302 which will provide for the waiver of fees on SBA loans, 90% guarantees on SBA loans and increase the size of SBA loans to $5 million. On that bill we have 63 Democrats and no Republicans. The partisianship in Washington is really hurting not just small business but the people of this country.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

HR4213 Arises from the ashes/ Prop 16 results

A surprise occurred Friday in that HR4213 passed the House after looking dead Thursday.

While funding of the SBA program to waive fees and extend the 90% guarantee on 7a and 504 loans is a very small piece of the bill it is critical for small business and its ability to access capital. The bill started as a $200 billion measure it got passed as a $113 billion measure.

Unfortuately the Senate did not take up 4213 as they were in recess so funding has run out for the waiver and the guarantee. Hopefully it will get taken up quickly when the Senators return but it is no sure thing it can get the 60 votes needed for passage.

I found the results of the question on Prop 16 interesting. This is the PG&E measure that would require a two thirds vote for Community Aggregation/Public Power. The Small Manufacturers Association of California supports the Measure and the Golden Gate Business Association opposes. Most associations that responded did not have a position.

What was more interesting is that of the 25 individuals that responded only two supported and 22 opposed with one undecided. This certainly is not a large enough number to make any conclusions but I was surprised how lopsided it was.

One would think that small business would be opposed to government getting into any business but it seems as though the two thirds vote is perceived by many as wrong.

Lets try one more time. If you didn’t respond what is your position on Prop 16?

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge-cal-insure.com
415-680-2188