Washington, DC – Congressman John D. Dingell (D-MI15) made the following remarks after the Senate passed a small business lending bill designed to help give these businesses greater access to credit and help create jobs.  The House has already passed a similar bill and is expected to take up the Senate’s version next week. 

“I want to applaud the bipartisan effort in the Senate to get this bill passed.  This bill will help the business owners I’ve met with in Michigan – both on Main Street and in our factories – get started on new projects and create jobs.  Over the August District Work Period I met with dozens of small business owners, store owners and high tech firms in Ann Arbor to window makers in Temperance and manufacturers in Monroe, and I heard the same concerns – small businesses need access to capital.  Bills like the Small Business Jobs and Credit Act passed by the Senate will address his critical need.  With initiatives like this – as well the tax credit in the health care reform bill and the new tax credit for hiring unemployed workers – passed by Congressional Democrats and signed by President Obama, we will get ultimately get our people back to work ”

The Senate’s Small Business Jobs Bill, similar to the House bill passed in June, sets up a $30 billion small business lending fund for small and medium sized community banks, which is expected to leverage $300 billion in lending and establishes a State Small Business Credit Initiative to strengthen state programs that support private-sector lending to small businesses, a provision championed by Congressman Dingell.  In addition, the bill extends successful Recovery Act provisions eliminating fees and raising the loan guaranty to 90 percent on popular Small Business Administration loans, the 7(a) loan and the 504/CDC loan and doubles the maximum size of most SBA loans.  There are also eight tax relief measures included in the Small Business Jobs Bill, listed below:

1. Zero Taxes on Capital Gains from Key Small Business Investments: Under the Recovery Act, 75 percent of capital gains on key small business investments were excluded from taxes. The Senate Small Business Jobs Bill temporarily puts in place for 2010 a provision called for by the President – elimination of all capital gains taxes on these investments. Key investments in 1 million small businesses would be eligible for this tax cut.
2. Extension and Expansion of Small Businesses’ Ability to Immediately Expense Capital Investments: The bill temporarily increases for 2010 and 2011 the amount of investments in new plants or equipment that 4.5 million small businesses would be eligible to immediately write off to $500,000 – its highest limit ever – while raising the level of investments at which the write-off phases out to $2 million.
3. Extension of 50% Bonus Depreciation: The bill extends through 2010– as the President proposed in his budget – a Recovery Act provision for 50 percent “bonus depreciation” for 2 million businesses, large and small, providing them with incentives to invest in plants and equipment by accelerating the rate at which they can deduct capital expenditures.
4. A New Deduction of Health Insurance Costs for Self-Employed: The bill would allow 2 million self-employed to deduct the cost of health insurance in 2010 for themselves and their family members in calculating their self-employment taxes. This provision is estimated to provide over $1.9 billion in tax cuts for these entrepreneurs.
5. Tax Relief and Simplification for Cell Phone Deductions: The bill would change tax rules so that the use of cell phones can be deducted without burdensome extra documentation – making it easier for virtually every small business in America to receive deductions that they are entitled to.
6. An Increase in the Deduction for Entrepreneurs’ Start-Up Expenses: The bill would temporarily increase in 2010 the amount of start-up expenditures entrepreneurs can deduct from their taxes from $5,000 to $10,000 (with a phase-out threshold of $60,000 in expenditures), offering an immediate incentive for someone with a new business idea to invest in starting up a new small business.
7. A Five-Year Carryback Of General Business Credits: The bill would allow certain small businesses to “carry back” their general business credits to offset five years of taxes – providing them with an instant tax break – while also allowing these credits to offset the Alternative Minimum Tax, reducing taxes for these small businesses.
8. Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business: The bill would change the penalty for failing to report certain tax transactions from a fixed dollar amount – which was criticized for imposing a larger penalty on small businesses – to a percentage of the tax benefits from the transaction.