[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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