Small Business Lending Bill

[Guest LAW]

CONGRESSIONAL RECORD - September 13, 2010

 

MESSAGES FROM THE PRESIDENT

Messages from the President of the

United States were communicated to

the Senate by Mrs. Neiman, one of his

secretaries.

 

EXECUTIVE MESSAGES REFERRED

As in executive session the Presiding

Officer laid before the Senate messages

from the President of the United

States submitting sundry nominations

which were referred to the appropriate

committees.

(The nominations received today are

printed at the end of the Senate proceedings.)

 

MEASURES READ THE FIRST TIME

The following bills were read the first

time:

S. 3772. A bill to amend the Fair Labor

Standards Act of 1938 to provide more effective

remedies to victims of discrimination in

the payment of wages on the basis of sex, and

for other purposes.

 

S. 3773. A bill to permanently extend the

2001 and 2003 tax relief provisions and to provide

permanent AMT relief and estate tax relief,

and for other purposes.

 

EC–7093. A communication from the President

of the United States, transmitting, pursuant

to law, a report on the continuation of

a national emergency declared in Executive

Order 13222 with respect to the lapse of the

Export Administration Act of 1979; to the

Committee on Banking, Housing, and Urban

Affairs.

 

EC–7150. A communication from the Chief

of the Publications and Regulations Branch,

Internal Revenue Service, Department of the

Treasury, transmitting, pursuant to law, the

report of a rule entitled ‘‘Application of Section

108(i) to Partnerships and S Corporations’’

(RIN1545–BJ00) received during adjournment

of the Senate in the Office of the

President of the Senate on August 24, 2010; to

the Committee on Finance.

 

EC–7152. A communication from the Chief

of the Publications and Regulations Branch,

Internal Revenue Service, Department of the

Treasury, transmitting, pursuant to law, the

report of a rule entitled ‘‘Alternative Amortization

Schedule for Single-Employer Plans

under PRA 2010’’ (Notice No. 2010–55) received

during adjournment of the Senate in

the Office of the President of the Senate on

August 11, 2010; to the Committee on Finance.

 

EC–7185. A communication from the Director

of Legislative and Regulatory Affairs,

Pension Benefit Guaranty Corporation,

transmitting, pursuant to law, the report of

a rule entitled ‘‘Benefits Payable in Terminated

Single-Employer Plans’’ (29 CFR Part

4022) received during adjournment of the

Senate in the Office of the President of the

Senate on August 17, 2010; to the Committee

on Health, Education, Labor, and Pensions.

 

S. 3084. A bill to increase the competitiveness

of United States businesses, particularly

small- and medium-sized manufacturing

firms, in interstate and global commerce,

foster job creation in the United

States, and assist United States businesses

in developing or expanding commercial activities

in interstate and global commerce

by expanding the ambit of the Hollings Manufacturing

Extension Partnership program

and the Technology Innovation Program to

include projects that have potential for commercial

exploitation in nondomestic markets,

providing for an increase in related resources

of the Department of Commerce, and

for other purposes (Rept. No. 111—289).

 

At the request of Mr. BROWN of Ohio,

the name of the Senator from New

York (Mr. SCHUMER) was added as a cosponsor

of S. 1617, a bill to require the

Secretary of Commerce to establish a

program for the award of grants to

States to establish revolving loan

unds for small and medium-sized manufacturers

to improve energy efficiency

and produce clean energy technology,

and for other purposes.

 

AMENDMENT NO. 4596

At the request of Mr. JOHANNS, the

names of the Senator from Arkansas

(Mrs. LINCOLN), the Senator from Wyoming

(Mr. BARRASSO), the Senator from

Kansas (Mr. ROBERTS), the Senator

from Wyoming (Mr. ENZI), the Senator

from North Carolina (Mr. BURR), the

Senator from South Carolina (Mr.

GRAHAM), the Senator from South Dakota

(Mr. THUNE) and the Senator from

Georgia (Mr. ISAKSON) were added as

cosponsors of amendment No. 4596 proposed

to H.R. 5297, an act to create the

Small Business Lending Fund Program

to direct the Secretary of the Treasury

to make capital investments in eligible

institutions in order to increase the

availability of credit for small businesses,

to amend the Internal Revenue

Code of 1986 to provide tax incentives

for small business job creation, and for

other purposes.

[Guest LAW]

TITLE I—PERMANENT TAX RELIEF

SEC. 101. 2001 TAX RELIEF MADE PERMANENT.

Title IX of the Economic Growth and Tax

Relief Reconciliation Act of 2001 is repealed.

SEC. 102. 2003 TAX RELIEF MADE PERMANENT.

Section 303 of the Jobs and Growth Tax Relief

Reconciliation Act of 2003 is repealed.

SEC. 103. TECHNICAL AND CONFORMING AMENDMENTS.

The Secretary of the Treasury or the Secretary’s

delegate shall not later than 90 days

after the date of the enactment of this Act,

submit to the Committee on Ways and

Means of the House of Representatives and

the Committee on Finance of the Senate a

draft of any technical and conforming

changes in the Internal Revenue Code of 1986

which are necessary to reflect throughout

such Code the purposes of the provisions of,

and amendments made by, this Act.

TITLE II—PERMANENT INDIVIDUAL AMT

RELIEF

SEC. 201. PERMANENT INDIVIDUAL AMT RELIEF.

(a) MODIFICATION OF ALTERNATIVE MINIMUM

TAX EXEMPTION AMOUNT.—

(1) IN GENERAL.—Paragraph (1) of section

55(d) of the Internal Revenue Code of 1986 (relating

‘‘(1) EXEMPTION AMOUNT FOR TAXPAYERS

OTHER THAN CORPORATIONS.—In the case of a

taxpayer other than a corporation, the term

‘exemption amount’ means—

‘‘(A) the dollar amount for taxable years

beginning in the calendar year as specified in

the table contained in paragraph (4)(A) in

the case of—

‘‘(i) a joint return, or

‘‘(ii) a surviving spouse,

‘‘( B ) the dollar amount for taxable years

beginning in the calendar year as specified in

the table contained in paragraph (4)( in the

case of an individual who—

‘‘( i ) is not a married individual, and

‘‘( ii ) is not a surviving spouse,

‘‘( C ) 50 percent of the dollar amount applicable

under paragraph (1)(A) in the case of a

married individual who files a separate return,

and

‘‘(D) $22,500 in the case of an estate or

trust.

For purposes of this paragraph, the term

‘surviving spouse’ has the meaning given to

such term by section 2( a ), and marital status

shall be determined under section 7703.’’.

(2) SPECIFIED EXEMPTION AMOUNTS.—

to exemption amount) is amended to

read as follows:

 

‘‘(1) EXEMPTION AMOUNT FOR TAXPAYERS

OTHER THAN CORPORATIONS.—In the case of a

taxpayer other than a corporation, the term

‘exemption amount’ means—

‘‘( A ) the dollar amount for taxable years

beginning in the calendar year as specified in

the table contained in paragraph (4)(A) in

the case of—

‘‘(i) a joint return, or

‘‘(ii) a surviving spouse,

‘‘( B ) the dollar amount for taxable years

beginning in the calendar year as specified in

the table contained in paragraph (4)( in the

case of an individual who—

‘‘(i) is not a married individual, and

‘‘(ii) is not a surviving spouse,

‘‘( C ) 50 percent of the dollar amount applicable

under paragraph (1)(A) in the case of a

married individual who files a separate return,

and

‘‘(D) $22,500 in the case of an estate or

trust.

For purposes of this paragraph, the term

‘surviving spouse’ has the meaning given to

such term by section 2(a), and marital status

shall be determined under section 7703.’’.

(2) SPECIFIED EXEMPTION AMOUNTS.—

 

Section

55(d) of such Code is amended by adding

at the end the following new paragraph:

‘‘(4) SPECIFIED EXEMPTION AMOUNTS.—

‘‘( A ) TAXPAYERS DESCRIBED IN PARAGRAPH

(1)( A ).—For purposes of paragraph (1)( A )—

 

ALTERNATIVE MINIMUM TAX RELIEF FOR

NONREFUNDABLE CREDITS.—

(1) IN GENERAL.—Subsection (a) of section

26 of the Internal Revenue Code of 1986 is

amended to read as follows:

‘‘(a) LIMITATION BASED ON AMOUNT OF

TAX.—The aggregate amount of credits allowed

by this subpart for the taxable year

shall not exceed the sum of—

‘‘(1) the taxpayer’s regular tax liability for

the taxable year reduced by the foreign tax

credit allowable under section 27(a), and

‘‘(2) the tax imposed by section 55(a) for

the taxable year.’’.

(2) CONFORMING AMENDMENTS.—

( A ) ADOPTION CREDIT.—

(i) Section 23( b ) of such Code is amended by

striking paragraph (4).

(ii) Section 23( c ) of such Code is amended

by striking paragraphs (1) and (2) and inserting

the following:

‘‘(1) IN GENERAL.—If the credit allowable

under subsection (a) for any taxable year exceeds

the limitation imposed by section 26(a)

for such taxable year reduced by the sum of

the credits allowable under this subpart

(other than this section and sections 25D and

1400C), such excess shall be carried to the

succeeding taxable year and added to the

credit allowable under subsection (a) for

such taxable year.’’.

(iii) Section 23( c ) of such Code is amended

by redesignating paragraph (3) as paragraph

(2).

( CHILD TAX CREDIT.—

(i) Section 24( of such Code is amended by

striking paragraph (3).

(ii) Section 24(d)(1) of such Code is amended—

(I) by striking ‘‘section 26( a )(2) or subsection

((3), as the case may be,’’ each

place it appears in subparagraphs (A) and (

and inserting ‘‘section 26(a)’’, and

(II) by striking ‘‘section 26(a)(2) or subsection

((3), as the case may be’’ in the second

last sentence and inserting ‘‘section

26(a)’’.

© CREDIT FOR INTEREST ON CERTAIN HOME

MORTGAGES.—Section 25(e)(1)( C ) of such Code

is amended to read as follows:

‘‘© APPLICABLE TAX LIMIT.—For purposes

of this paragraph, the term ‘applicable tax

limit’ means the limitation imposed by section

26(a) for the taxable year reduced by the

sum of the credits allowable under this subpart

(other than this section and sections 23,

25D, and 1400C).’’.

(D) SAVERS’ CREDIT.—Section 25B of such

Code is amended by striking subsection (g).

(E) RESIDENTIAL ENERGY EFFICIENT PROPERTY.—

Section 25D© of such Code is amended

to read as follows:

‘‘© CARRYFORWARD OF UNUSED CREDIT.—If

the credit allowable under subsection (a) exceeds

the limitation imposed by section 26(a)

for such taxable year reduced by the sum of

the credits allowable under this subpart

(other than this section), such excess shall

be carried to the succeeding taxable year and

added to the credit allowable under subsection

(a) for such succeeding taxable

year.’’.

(F) CERTAIN PLUG-IN ELECTRIC VEHICLES.—

Section 30©(2) of such Code is amended to

read as follows:

‘‘(2) PERSONAL CREDIT.—For purposes of

this title, the credit allowed under subsection

(a) for any taxable year (determined

after application of paragraph (1)) shall be

treated as a credit allowable under subpart A

for such taxable year.’’.

(G) ALTERNATIVE MOTOR VEHICLE CREDIT.—

Section 30B(g)(2) of such Code is amended to

read as follows:

‘‘(2) PERSONAL CREDIT.—For purposes of

this title, the credit allowed under subsection

(a) for any taxable year (determined

after application of paragraph (1)) shall be

treated as a credit allowable under subpart A

for such taxable year.’’.

(H) NEW QUALIFIED PLUG-IN ELECTRIC VEHICLE

CREDIT.—Section 30D©(2) of such Code is

amended to read as follows:

‘‘(2) PERSONAL CREDIT.—For purposes of

this title, the credit allowed under subsection

(a) for any taxable year (determined

after application of paragraph (1)) shall be

treated as a credit allowable under subpart A

for such taxable year.’’.

(I) CROSS REFERENCES.—Section 55©(3) of

such Code is amended by striking ‘‘26(a),

30C(d)(2),’’ and inserting ‘‘30C(d)(2)’’.

(J) FOREIGN TAX CREDIT.—Section 904 of

such Code is amended by striking subsection

(i) and by redesignating subsections (j) , (k),

and (l) as subsections (i), (j), and (k), respectively.

(K) FIRST-TIME HOME BUYER CREDIT FOR THE

DISTRICT OF COLUMBIA.—Section 1400C(d) of

such Code is amended to read as follows:

‘‘(d) CARRYFORWARD OF UNUSED CREDIT.—If

the credit allowable under subsection (a) exceeds

the limitation imposed by section 26(a)

for such taxable year reduced by the sum of

the credits allowable under subpart A of part

IV of subchapter A (other than this section

and section 25D), such excess shall be carried

to the succeeding taxable year and added to

the credit allowable under subsection (a) for

such taxable year.’’.

© EFFECTIVE DATE.—The amendments

made by this section shall apply to taxable

years beginning after December 31, 2009.

[Guest LAW]

SA 4607. Mr. UDALL of New Mexico

submitted an amendment intended to

be proposed to amendment SA 4594 proposed

by Mr. REID (for Mr. BAUCUS (for

himself, Ms. LANDRIEU, and Mr. REID))

to the bill H.R. 5297, to create the

Small Business Lending Fund Program

to direct the Secretary of the Treasury

to make capital investments in eligible

institutions in order to increase the

availability of credit for small businesses,

to amend the Internal Revenue

Code of 1986 to provide tax incentives

for small business job creation, and for

other purposes; which was ordered to

lie on the table; as follows:

On page 220, line 20, insert ‘‘and planned

outreach efforts to women-owned businesses,

veteran-owned businesses, and minorityowned

businesses’’ before ‘‘, where appropriate’’.

 

SA 4608. Mr. BEGICH (for himself and

Mr. NELSON of Nebraska) submitted an

amendment intended to be proposed by

him to the bill H.R. 5297, to create the

Small Business Lending Fund Program

to direct the Secretary of the Treasury

to make capital investments in eligible

institutions in order to increase the

availability of credit for small businesses,

to amend the Internal Revenue

Code of 1986 to provide tax incentives

for small business job creation, and for

other purposes; which was ordered to

lie on the table;

 

SA 4610. Mr. THUNE submitted an

amendment intended to be proposed to

amendment SA 4594 proposed by Mr.

REID (for Mr. BAUCUS (for himself, Ms.

LANDRIEU, and Mr. REID)) to the bill

H.R. 5297, to create the Small Business

Lending Fund Program to direct the

Secretary of the Treasury to make capital

investments in eligible institutions

in order to increase the availability

of credit for small businesses,

to amend the Internal Revenue Code of

1986 to provide tax incentives for small

business job creation, and for other

purposes; which was ordered to lie on

the table;

 

SA 4611. Mr. NELSON of Florida submitted

an amendment intended to be

proposed by him to the bill H.R. 5297,

to create the Small Business Lending

Fund Program to direct the Secretary

of the Treasury to make capital investments

in eligible institutions in order

to increase the availability of credit

for small businesses, to amend the Internal

Revenue Code of 1986 to provide

tax incentives for small business job

creation, and for other purposes; which

was ordered to lie on the table;

 

SA 4613. Mrs. HUTCHISON submitted

an amendment intended to be proposed

by her to the bill H.R. 5297, to create

the Small Business Lending Fund Program

to direct the Secretary of the

Treasury to make capital investments

in eligible institutions in order to increase

the availability of credit for

small businesses, to amend the Internal

Revenue Code of 1986 to provide tax

incentives for small business job creation,

and for other purposes; which

was ordered to lie on the table;

 

SA 4614. Mr. THUNE submitted an

amendment intended to be proposed to

amendment SA 4594 proposed by Mr.

REID (for Mr. BAUCUS (for himself, Ms.

LANDRIEU, and Mr. REID)) to the bill

H.R. 5297, to create the Small Business

Lending Fund Program to direct the

Secretary of the Treasury to make capital

investments in eligible institutions

in order to increase the availability

of credit for small businesses,

to amend the Internal Revenue Code of

1986 to provide tax incentives for small

business job creation, and for other

purposes; which was ordered to lie on

the table;

 

( A ) REQUIREMENTS ON PREFERRED STOCK

AND OTHER FINANCIAL INSTRUMENTS.—Any

preferred stock or other financial instrument

issued to Treasury by an eligible institution

receiving a capital investment under the

Program shall provide that—

(i) the rate at which dividends or interest

are payable shall be 5 percent per annum initially;

(ii) within the first 2 years after the date of

the capital investment under the Program,

the rate may be adjusted based on the

amount of an eligible institution’s small

business lending. Changes in the amount of

small business lending shall be measured

against the average amount of small business

lending reported by the eligible institution

in its call reports for the 4 full quarters

immediately preceding the date of enactment

of this Act, minus adjustments from

each quarterly balance in respect of—

(I) net loan charge offs with respect to

small business lending; and

(II) gains realized by the eligible institution

resulting from mergers, acquisitions or

purchases of loans after origination and syndication;

which adjustments shall be determined

in accordance with guidance promulgated

by the Secretary; and

(iii) during any calendar quarter during

the initial 2-year period referred to in clause

(ii), an institution’s rate shall be adjusted to

reflect the following schedule, based on that

institution’s change in the amount of small

business lending relative to the baseline—

(I) if the amount of small business lending

has increased by less than 2.5 percent, the

dividend or interest rate shall be 5 percent;

(II) if the amount of small business lending

has increased by 2.5 percent or greater, but

by less than 5.0 percent, the dividend or interest

rate shall be 4 percent;

(III) if the amount of small business lending

has increased by 5.0 percent or greater,

but by less than 7.5 percent, the dividend or

interest rate shall be 3 percent;

(IV) if the amount of small business lending

has increased by 7.5 percent or greater,

and but by less than 10.0 percent, the dividend

or interest rate shall be 2 percent; or

 

( V ) if the amount of small business lending

has increased by 10 percent or greater, the

dividend or interest rate shall be 1 percent.

( B ) BASIS OF INITIAL RATE.—The initial dividend

or interest rate shall be based on call

report data published in the quarter immediately

preceding the date of the capital investment

under the Program.

( C ) TIMING OF RATE ADJUSTMENTS.—Any

rate adjustment shall occur in the calendar

quarter following the publication of call report

data, such that the rate based on call

report data from any one calendar quarter,

which is published in the first following calendar

quarter, shall be adjusted in that first

following calendar quarter and payable in

the second following quarter.

( D ) RATE FOLLOWING INITIAL 2-YEAR PERIOD.—

Generally, the rate based on call report

data from the eighth calendar quarter

after the date of the capital investment

under the Program shall be payable until the

expiration of the 41⁄2-year period that begins

on the date of the investment. In the case

where the amount of small business lending

has remained the same or decreased relative

to the institution’s baseline in the eighth

quarter after the date of the capital investment

under the Program, the rate shall be 7

percent until the expiration of the 41⁄2-year

period that begins on the date of the investment.

( E ) RATE FOLLOWING INITIAL 41⁄2 -YEAR PERIOD.—

The dividend or interest rate paid on

any preferred stock or other financial instrument

issued by an eligible institution that

receives a capital investment under the Program

shall increase to 9 percent at the end of

the 41⁄2-year period that begins on the date of

the capital investment under the Program.

( F ) LIMITATION ON RATE REDUCTIONS WITH

RESPECT TO CERTAIN AMOUNT.—The reduction

in the dividend or interest rate payable to

Treasury by any eligible institution shall be

limited such that the rate reduction shall

not apply to a dollar amount of the investment

made by Treasury that is greater than

the dollar amount increase in the amount of

small business lending realized under this

program. The Secretary may issue guidelines

that will apply to new capital investments

limiting the amount of capital available to

eligible institutions consistent with this

limitation.

( G ) RATE ADJUSTMENTS FOR S CORPORATION.—

Before making a capital investment

in an eligible institution that is an S corporation

or a corporation organized on a mutual

basis, the Secretary may adjust the dividend

or interest rate on the financial instrument

to be issued to the Secretary, from the

dividend or interest rate that would apply

under subparagraphs ( A ) through ( F ), to take

into account any differential tax treatment

of securities issued by such eligible institution.

For purposes of this subparagraph, the

term ‘‘S corporation’’ has the same meaning

as in section 1361( a ) of the Internal Revenue

Code of 1986.

( H ) REPAYMENT DEADLINE.—The capital investment

received by an eligible institution

under the Program shall be evidenced by preferred

stock or other financial instrument

that—

(i) includes, as a term and condition, that

the capital investment will—

(I) be repaid not later than the end of the

10-year period beginning on the date of the

capital investment under the Program; or

(II) at the end of such 10-year period, be

subject to such additional terms as the Secretary

shall prescribe, which shall include a

requirement that the stock or instrument

shall carry the highest dividend or interest

rate payable; and

(ii) provides that the term and condition

described under clause (i) shall not apply if

the application of that term and condition

 

would adversely affect the capital treatment

of the stock or financial instrument under

current or successor applicable capital provisions

compared to a capital instrument with

identical terms other than the term and condition

described under clause (i).

(I) REQUIREMENTS ON FINANCIAL INSTRUMENTS

ISSUED BY A COMMUNITY DEVELOPMENT

FINANCIAL INSTITUTION LOAN FUND.—Any equity

equivalent capital issued to the Treasury

by a community development loan fund

receiving a capital investment under the

Program shall provide that the rate at which

interest is payable shall be 2 percent per

annum for 8 years. After 8 years, the rate at

which interest is payable shall be 9 percent.

(6) ADDITIONAL INCENTIVES TO REPAY.—The

Secretary may, by regulation or guidance

issued under section 4104(9), establish repayment

incentives in addition to the incentive

in paragraph (5)( E ) that will apply to new

capital investments in a manner that the

Secretary determines to be consistent with

the purposes of this subtitle.

[Guest LAW]

SA 4615. Mr. ENSIGN submitted an

amendment intended to be proposed by

him to the bill H.R. 5297, to create the

Small Business Lending Fund Program

to direct the Secretary of the Treasury

to make capital investments in eligible

institutions in order to increase the

availability of credit for small businesses,

to amend the Internal Revenue

Code of 1986 to provide tax incentives

for small business job creation, and for

other purposes; which was ordered to

lie on the table; as follows:

At the appropriate place, insert the following:

SEC. ll. MAXIMUM 35 PERCENT RATE ON TRADE

OR BUSINESS INCOME.

(a) IN GENERAL.—Section 1 of the Internal

Revenue Code of 1986 is amended by adding

at the end the following new subsection:

‘‘(j) MAXIMUM RATE ON TRADE OR BUSINESS

INCOME.—

‘‘(1) IN GENERAL.—If, for any applicable

taxable year, a taxpayer who is an individual

(other than an estate or trust) has qualified

trade or business income, then, in lieu of the

tax imposed on the taxpayer by subsection

(a), (, ©, or (d), there is hereby imposed a

tax equal to the lesser of—

‘‘(A) the tax imposed by this section without

regard to this subsection, or

‘‘( a tax equal to the sum of—

‘‘(i) a tax computed at the rates and in the

manner as if this subsection had not been enacted

on the greater of—

‘‘(I) taxable income reduced by qualified

trade or business income and any net capital

gain, or

‘‘(II) the amount of taxable income (reduced

by any net capital gain) taxed at a

rate below the highest rate of tax imposed by

section 11( for such taxable year, plus

‘‘(ii) a tax equal to the product of such

highest rate of tax and the taxpayer’s qualified

trade or business income which was not

taken into account under clause (i).

‘‘(2) COORDINATION WITH RATE ON NET CAPITAL

GAINS.—If a taxpayer has qualified

small business income for any applicable

taxable year and also has a net capital gain

for such taxable year—

‘‘(A) this subsection shall not apply, and

‘‘( the tax computed under subsection

(h)(1)(A) shall not exceed the amount determined

under paragraph (1).

‘‘(3) QUALIFIED TRADE OR BUSINESS INCOME.—

For purposes of this subsection—

‘‘(A) IN GENERAL.—The term ‘qualified

trade or business income’ means, with respect

to any taxable year, an amount equal

to the excess (if any) of—

 

‘‘(i) the aggregate income from the actual

conduct of a trade or business which—

‘‘(I) is income from sources within the

United States (within the meaning of section

861), and

‘‘(II) is not passive income (as defined in

section 904(d)(2)(), over

‘‘(ii) the sum of—

‘‘(I) the cost of goods sold that are allocable

to such income, and

‘‘(II) other expenses, losses, or deductions

that are properly allocable to such income.

‘‘( CAPITAL GAINS AND LOSSES DISREGARDED.—

Items taken into account in determining

net capital gain shall not be taken

into account in determining qualified trade

or business income.

‘‘(4) APPLICABLE TAXABLE YEAR.—For purposes

of this subsection, the term ‘applicable

taxable year’ means any taxable year of the

taxpayer with respect to which any rate of

tax under the applicable table contained in

subsection (a), (, ©, or (d) exceeds 35 percent.

‘‘(5) NET CAPITAL GAIN.—For purposes of

this subsection, the term ‘net capital gain’

has the meaning given such term by subsection

(h).’’.

( EFFECTIVE DATE.—The amendment

made by this section shall apply to taxable

years beginning after December 31, 2010.

 

SA 4616. Mr. UDALL of New Mexico

submitted an amendment intended to

be proposed to amendment SA 4594 proposed

by Mr. REID (for Mr. BAUCUS (for

himself, Ms. LANDRIEU, and Mr. REID))

to the bill H.R. 5297, to create the

Small Business Lending Fund Program

to direct the Secretary of the Treasury

to make capital investments in eligible

institutions in order to increase the

availability of credit for small businesses,

to amend the Internal Revenue

Code of 1986 to provide tax incentives

for small business job creation, and for

other purposes; which was ordered to

lie on the table; as follows:

On page 237, line 25, before the period insert

‘‘including, to the extent possible based

on the available reporting data, details on

lending to women-owned businesses, veteran owned

businesses, and minority-owned businesses’’.

[Guest LAW]

SA 4617. Mr. FRANKEN submitted an

amendment intended to be proposed to

amendment SA 4594 proposed by Mr.

REID (for Mr. BAUCUS (for himself, Ms.

LANDRIEU, and Mr. REID)) to the bill

H.R. 5297, to create the Small Business

Lending Fund Program to direct the

Secretary of the Treasury to make capital

investments in eligible institutions

in order to increase the availability

of credit for small businesses,

to amend the Internal Revenue Code of

1986 to provide tax incentives for small

business job creation, and for other

purposes; which was ordered to lie on

the table; as follows:

On page 41, after line 25, add the following:

SEC. 1137. TEMPORARY PROGRAM FOR RAPID DEPLOYMENT

OF RENEWABLE ENERGY

AND ELECTRIC POWER TRANSMISSION

PROJECTS.

Section 1705(a) of the Energy Policy Act of

2005 (42 U.S.C. 16516(a)) is amended by adding

at the end the following:

‘‘(4) Energy efficiency projects, including

projects to retrofit residential, commercial,

and industrial buildings, facilities, and

equipment.’’

[Guest LAW]

ORDERS FOR TUESDAY,

SEPTEMBER 14, 2010

Mr. DURBIN. Madam President, I ask

unanimous consent that when the Senate

completes its business today, it adjourn

until 10 a.m. on Tuesday, September

14; that following the prayer

and the pledge, the Journal of proceedings

be approved to date, the

morning hour be deemed expired, the

time for the two leaders be reserved for

their use later in the day, and the Senate

resume consideration of H.R. 5297,

the small business jobs bill, with the

time until 11 a.m. equally divided and

controlled between the two leaders or

their designees. Finally, I ask that the

Senate recess from 12:30 p.m. until 2:15

p.m. tomorrow to allow for the weekly

caucus meetings.

The PRESIDING OFFICER. Without

objection, it is so ordered.

 

PROGRAM

Mr. DURBIN. Madam President, at 11

a.m., the Senate will proceed to a series

of up to three rollcall votes in relation

to the small business jobs bill.

Those votes will be on the motion to

invoke cloture on the Johanns amendment

relating to 1099 forms, the Nelson

of Florida amendment, also on 1099

forms, and the substitute amendment

to the small business jobs bill.

[Guest LAW]

Johanns: Protecting Health Care Bill More Important To Senate Democrats Than Supporting Small Businesses

 

U.S. Sen. Mike Johanns (R-Neb.) took his fight to support small businesses and job creation to the floor of the Senate today. Despite the strong support of small businesses across the country, the Senate rejected the Johanns amendment 46-52.

 

“Regulations, mandates and government spending simply will not create jobs,” said Johanns. “Today’s vote signifies that Senate Democrats and the Obama Administration would rather protect a section of their more than 2,400 page unpopular health care bill than stand up for small businesses. It is wrong to have paid for the President’s health care plan on the backs of small businesses. My amendment would have truly helped small businesses and I am committed to continuing this fight until this provision is repealed.”

 

The Johanns amendment would have fully repealed section 9006 of the Patient Protection and Affordable Care Act - a provision mandating that every business, charity, and local and state government entity submit 1099 forms for business transactions totaling $600 or more in a given year. The repeal has been endorsed by The Coalition for Fairness in Tax Compliance, the U.S. Chamber of Commerce, The National Federation of Independent Businesses, The American Farm Bureau Federation, and the Americans for Tax Reform, among others.

 

“This mandate threatens to swamp as many as 40 million businesses, churches, non-profits, and other entities with useless tax reporting paperwork, consuming valuable resources and limiting their ability to grow and hire more workers,” added Johanns. “Small businesses are the job creators that drive our economy and this mandate is a senseless obstacle. Full repeal is the only solution to this problem.”

 

Background:

 

Section 9006 of the health care law mandates that every business, charity, and local and state government entity submit 1099 forms for business transactions totaling $600 or more in a given year. Mandate adds routine business expenses like phone, office products, shipping costs; increases businesses’ reporting requirement by as much as 2,000 percent.

 

• Affects as many as 40 million businesses and other entities: Estimate by the National Taxpayer Advocate Service, an IRS ombudsman - includes 26 million sole proprietorships, excluding farms.

 

• Increases overhead costs for small employers: Additional paperwork requires more staff time and therefore increases costs. A Nebraska small business estimates the mandate will cost $23,000/year.

 

• Creates a perverse incentive for companies to consolidate suppliers, cut-out small businesses: To avoid paperwork, businesses will likely reduce the number of transactions over $600 by consolidating suppliers, in which case smaller suppliers would lose out.

 

• Leads to improper IRS penalties: The National Taxpayer Advocate Service reports that the IRS “will face challenges making productive use of this new volume of information,” and that “…it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort.”

 

• Repeal of Section 9006 is broadly supported throughout the country: The Coalition for Fairness in Tax Compliance, U.S. Chamber of Commerce, National Federation of Independent Businesses, American Farm Bureau Federation; collectively represent thousands of businesses and ag producers.

[Guest LAW]

List of businesses across the country supporting repeal of the 1099 paperwork mandate.

 

http://www.uschamber...health-care-law

[Guest LAW]

U.S. Chamber Condemns Senate’s Failure to Repeal 1099 Reporting Requirement

 

‘In this economy, there is little defense for supporting oppressive regulations on small businesses,’ Says Josten

 

WASHINGTON, D.C.—U.S. Chamber of Commerce Executive Vice President for Government Affairs, R. Bruce Josten, issued the following statement today on the Senate’s failure to pass Senator Johanns’ amendment to repeal the burdensome 1099 reporting requirement included in the health care law:

 

“Today the Senate obstructed a measure that would’ve prevented an avalanche of new paperwork for small business owners. Their refusal to recognize that small businesses will now be forced to spend precious time and resources reporting to the federal government rather than producing, growing, and creating jobs for Americans demonstrates a fundamental misunderstanding about the challenges facing this economy. In this economy, there is little defense for supporting oppressive regulations on small businesses that will hamper their ability to put people back to work.”

 

The Chamber led 2,434 businesses, chambers, and associations from all 50 states in sending a letter to the Senate highlighting the business community’s commitment to repealing the 1099 reporting mandate included in the health care law. Tomorrow dozens of Chamber small business members will come to Washington to let their Members of Congress know that this provision must be repealed.

 

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

[Guest Nestor]

Isn’t the requirement for 1099 reporting in the Affordable Care act going beyond the usual 1099 requirement for services to include goods? This will add a tremendous burden to small businesses, sole proprietor and small partnerships.

[Guest PierceNichols]

If you are a small business that commonly sells to other small businesses, this is an even worse nightmare. It’s certain that a significant number of small businesses will not comply, or will have have vanished, or will be late. Almost all of the reasons for that will be innocent, but when the vendor needs to file their taxes, the missing 1099s become a serious headache. And that’s before you get into the errors which will occur and will have to be reconciled, both with your customers and your vendors.

 

And everyone I know with any experience running a business or doing the books, no matter what their politics are, thinks this requirement is utterly batshit insane. They should rename it the CPA Full Employment Act.

[Guest AlwaysRed]

Soon American Small Business Owners will be forced not to use Dollar Bills for petty cash.

 

U.S. Senator Mike Enzi, R-Wyo., believes most small businesses aren’t ready for the headaches and paperwork the new health care reform law will bring them and he expressed his concerns during a Senate Finance Committee hearing this morning as he discussed the new 1099 form requirements with accounting experts testifying before the panel.

 

“The health care reform bill will require business owners to submit onerous and duplicative 1099 forms for every single business-to-business transaction over $600. This includes anything from utilities, office supplies and construction materials. Not only does the health care bill bankrupt our country and require every American to purchase health insurance or face new tax penalties, it also burdens small businesses with paperwork for non-health care related expenses,” said Enzi.

 

Section 9006 of the Patient Protection and Affordable Care Act requires business owners to submit a separate 1099 form for every single business-to-business transaction that totals more than $600 in a year.

 

Carol Markman, a Certified Public Accountant and president of the National Conference of CPA Practitioners, said small businesses do not understand the paperwork burdens that are coming down the road.

 

“I think that this 1099 issue is the hidden gorilla in the room,” said Markman.

 

“This is the kind of paperwork burden that will distract small businesses from doing business and providing jobs. With our economy struggling, now is not the time to saddle business owners with more red tape requirements,” said Enzi.

 

Enzi is working with his colleagues on legislation to repeal Section 9006 of the health care law.

[Guest LAW]

There is a flip side to that coin. Here is a common scheme.

 

Lapping

 

A somewhat more complicated type of embezzlement is called

lapping. This involves the temporary withholding of receipts,

such as for payments on accounts. Lapping is a continuing scheme

that usually starts with a small amount but can run into

thousands of dollars before it is detected. For example, take an

employee who opens mail or otherwise receives cash and checks as

payment on open accounts. The employee holds out a $100 cash

payment made by a customer A on March 1. To avoid arousing

suspicion on A's part, $100 is taken from a $200 payment made by

customer B on March 5. This is sent on, together with the

necessary documentation, for processing and crediting to the

account of A. The embezzler pockets the remaining $100, which

increases the overall shortage to $200.

 

As this borrowing procedure continues, the employee makes away

with increasingly larger amounts of money, involving more and

more accounts. A fraud of this nature can run on for years. Of

course, it requires detailed record keeping by the embezzler in

order to keep track of shortages and transfer money from one

account to another to avoid suspicion. Any indication that an

employee is keeping personal records of business transactions

outside your regular accounting books should be looked into.

 

Sometimes an embezzler who is carrying on a lapping scheme also

has access to accounts receivable records and statements, and is

thus in a position to alter the statements mailed out to

customers. The fraud may continue undetected over a long period

of time, until something unusual happens. A customer complaint

may spotlight the situation or the matter may be surfaced through

audit procedures such as confirmation of accounts receivable. One

embezzler who also handled customer complaints was able to avoid

detection for many years. The amount of the shortage reached such

proportions and covered so many accounts that he dared not take a

vacation. He even ate lunch at his desk lest some other employee

receive an inquiry from a customer concerning a discrepancy in a

statement. The owner-manager for whom he worked admired his

diligence and loyalty and fellow workers marveled that his

apparent frugality enabled him to enjoy a rather high standard of

living. But the inevitable finally happened. The employee was

hospitalized, and in his absence his fraudulent scheme came to

light. One reason many firms require regular vacations is to keep

some indispensable employee from dispensing with company funds

illegally.

 

Fraudulent Sales

 

Sometimes, when a company becomes so large that the owner-manager can no longer exercise personal surveillance of accounting activities, opportunities arise for a dishonest employee to setup a dummy supplier and falsify documentation of fictitious purchase transactions.

 

Personal items can be bought and charged to the company.

 

Make Your System Fraud ProofThe first thing an owner-manager should do is set a good example.Your employees watch what you do and tend to imitate your habits-- good or bad. An employer who dips into petty cash, fudges onan expense account, uses company funds for personal items or setsother examples of loose business behavior, will find employeesrationalizing dishonest actions with the attitude If it's okayfor the boss, it's okay for me.An adequate accounting system with appropriate internal controlsis your principal means for preventing and detecting fraud. Havea public accountant set it up; then be sure it is tested andevaluated at least annually by the auditor. Periodic examinationwill ensure that there are no loopholes through which anembezzler can manipulate your funds.Design your auditing system to help document evidence in theevent someone does try to embezzle. One problem in fidelity lossclaims is proving the amount that was stolen. The owner-managerhas to support a loss claim with evidence from the company'srecords.You should insist that your accounting system provide you with atleast monthly operating statements. These will inform you of theoperations to date and the firm's financial condition. You canuse these documents to compare the figures with prior periods.Any unusual or unexplained variations should be discussed withyour accountant.Another fundamental control is separation of the duties ofemployees. For example, persons concerned with receiving checksand cash should not also be responsible for making entries in theaccounts receivable records. No one person should handle atransaction from beginning to end. If you do not exercise tightcontrol over invoices, purchase orders, discounts and customercredits, you are asking for trouble.

 

* Spot check records. Spot check your accounting records and assets to satisfy yourself that all is well and that your plan of internal control is being implemented. * Control outgoing funds. Personally approve unusual discounts and bad debt write-offs. Approve or spot check credit memos and other documentation for sales returns and allowances. Don't delegate the signing of checks and approval of cash disbursements unless absolutely necessary and never approve any payment without sufficient documentation or prior knowledge of the transaction. Don't sign blank checks. Don't leave a supply of signed blank checks when you go on vacation.

* Control invoices. Examine all invoices and supporting data before signing checks. Make sure that all merchandise was actually received and the price was reasonable. In many false purchase schemes, the embezzler neglects to make up receiving forms or other records purporting to show receipt of merchandise. Personally cancel all invoices at the time you sign the check to prevent double payment, through error or otherwise. * Examine checking account items. Inspect all prenumbered checkbooks and other prenumbered forms from time to time to insure that checks or forms from the backs of the books have not been removed and possibly used in a fraudulent scheme.

Computer-related CrimeSmall businesses are learning the many advantages of computers inevery aspect of their operations. It is not unusual for theentire business to depend on computerized data. Personnelrecords, tax records, inventories, receivables, payables,shipments, bank accounts and all other vital records arecontained on small diskettes that easily fit in a pocket. In sucha concentrated form, business records are extremely vulnerable toremoval or destruction. If something should happen to thosediskettes, it could have the same effect as the suddendisappearance of significant business records and files.

 

[Guest IHATETAXES]

Have you ever noticed criminals are paranoid of other criminals.

 

We know Congress is filled with them.

 

We know members of Congress want our government coffers filled on the sweat of Small Business.

 

They consider themselves taskmasters to make life so difficult for the small business that people are forced to give up hope for their personal American Dream and work as salespeople in Chinamart.

[Guest LAW]

The $42 billion Small Business Jobs Act took a step forward, clearing a key procedural hurdle in the Senate, 61-37. Republicans George Voinovich, who is retiring, and former Gov. Charlie Crist (I-FL) Chief of Staff George LeMieux voted for it, helping Democrats overcome a filibuster.

[Guest IHATETAXES]

You can thank the following Senators for NOT wanting to repeal Section 9006 of the Patient Protection and Affordable Care Act. You can thank the following Senators for protecting a 1099 provision to increase tax revenues to the tune of $19 billion.

 

Joseph Lieberman, Bernard Sanders, Daniel Akaka, Max Baucus, Mark Begich, Jeff Bingaman, Barbara Boxer, Sherrod Brown, Roland Burris, Maria Cantwell, Ben Cardin, Tom Carper, Bob Casey, Kent Conrad, Chris Dodd, Byron Dorgan, Dick Durbin, Russ Feingold, Dianne Feinstein, Al Franken, Kirsten Gillibrand, Carte Goodwin, Kay Hagan, Tom Harkin, Daniel Inouye, Tim Johnson, Edward Kaufman, John Kerry, Amy Klobuchar, Herb Kohl, Mary Landrieu, Frank Lautenberg, Patrick Leahy, Carl Levin, Claire McCaskill, Robert Menendez, Jeff Merkley, Barbara Mikulski, Patty Murray, Bill Nelson, Jack Reed, Harry Reid, Jay Rockefeller, Chuck Schumer, Jeanne Shaheen, Arlen Specter, Debbie Stabenow, Jon Tester, Tom Udall, Mark Udall, Sheldon Whitehouse, Ron Wyden

[Guest Bill H.]

I think the $12 billion tax cut for small businesses is great. This will allow businesses to expense up to $500,000 in capital investments. You will be able to write off of 50% of the cost of new equipment and 100 percent exclusion from capital gains taxes on small business investments.

[Luke_Wilbur]

I am going to ask both my accountant and banker what they this about this issue. Will it take more time? I think Yes, but I could be wrong. Will it cost me more? Again, I think Yes. I pretty sure that I am right.

[Guest LAW]

Statement of President Obama on Final Passage of the Small Business Jobs Bill

 

The small business jobs bill passed today will help provide loans and cut taxes for millions of small business owners without adding a dime to our nation’s deficit. After months of partisan obstruction and needless delay, I’m grateful that Democrats and a few Republicans came together to support this common-sense plan to put Americans back to work. I look forward to signing the bill on Monday.

[Guest Edgar]

Looks like that bill was one big fat failure

 

http://www.latimes.com/business/la-fi-credit-cutoff-20120103,0,3538902.story

 

Bank of America, under pressure to raise capital and cut risks, is severing lines of credit to some small-business owners who have used them to stay afloat.

 

The Charlotte N.C., bank is demanding that these customers pay off their credit line balances all at once instead of making monthly payments. If they can't pay in full, they are being offered new repayment plans for as long as five years, but with far higher interest rates than their original credit lines had.