[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2967 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 2967

  To amend the Internal Revenue Code of 1986 to provide a refundable 
     credit for small business job growth, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 28, 2010

  Mr. Cardin introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide a refundable 
     credit for small business job 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Boosting 
Entrepreneurship and New Jobs Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Refundable tax credit for new hires by small businesses.
Sec. 3. Credit for employee health insurance expenses of small 
                            businesses.
Sec. 4. Surcharge on high income individuals.
Sec. 5. Direct loans to small business concerns.
Sec. 6. Extramural research and development budget of the National 
                            Institutes of Health.
Sec. 7. Section 7(a) business loans.
Sec. 8. Microloan program.
Sec. 9. Maximum loan amounts under 504 program.
Sec. 10. Sense of Congress regarding cabinet level status for the 
                            Administrator of the Small Business 
                            Administration.
Sec. 11. Sense of Congress regarding financial support for small 
                            businesses by certain financial 
                            institutions.

SEC. 2. REFUNDABLE TAX CREDIT FOR NEW HIRES BY SMALL BUSINESSES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36A the following new section:

``SEC. 36B. NEW HIRES BY SMALL BUSINESSES.

    ``(a) Determination of Amount.--There shall be allowed as a credit 
against the tax imposed by this subtitle for the taxable year an amount 
equal to 15 percent of the qualified first-year wages for such year.
    ``(b) Qualified Wages Defined.--For purposes of this section--
            ``(1) In general.--The term `qualified wages' means the 
        wages paid or incurred by a qualified small business during the 
        taxable year to an individual who is a qualified small business 
        employee.
            ``(2) Qualified first-year wages.--The term `qualified 
        first-year wages' means, with respect to a qualified small 
        business employee, qualified wages attributable to service 
        rendered during the 1-year period beginning with the day the 
        individual begins work for the employer.
            ``(3) Only first $20,000 of wages taken into account.--The 
        amount of the qualified first-year wages which may be taken 
        into account with respect to any individual shall not exceed 
        $20,000.
            ``(4) Wages.--
                    ``(A) In general.--The term `wages' has the meaning 
                given such term by section 51(c).
                    ``(B) Special rules for agricultural and railway 
                labor.--If such individual is an employee to whom 
                subparagraph (A) or (B) of section 51(h)(1) applies, 
                rules similar to the rules of such subparagraphs shall 
                apply except that--
                            ``(i) such subparagraph (A) shall be 
                        applied by substituting `$20,000' for `$6,000', 
                        and
                            ``(ii) such subparagraph (B) shall be 
                        applied by substituting `$1,666.66' for `$500'.
    ``(c) Qualified Small Business Employee.--For purposes of this 
section--
            ``(1) In general.--The term `qualified small business 
        employee' means--
                    ``(A) an individual hired by a qualified small 
                business who is not an employee within the meaning of 
                section 401(c)(1), or
                    ``(B) a part-time employee promoted to full-time 
                employee status (within the meaning of section 44(b)) 
                by such business.
            ``(2) Qualified small business.--The term `qualified small 
        business' has the meaning given the term `small employer' by 
        section 4980D(d)(2), determined by substituting `25 employees' 
        for `50 employees'.
    ``(d) Maintenance of Workforce.--No credit under this section shall 
be allowed to any employer for any taxable year if the total number of 
employees of such employer during any quarter of such taxable year is 
less than the total number of such employees during the corresponding 
quarter in the preceding taxable year.
    ``(e) Certain Rules To Apply.--Rules similar to the rules of 
section 52, and subsections (d)(11), (f), (g), (i)(1), (i)(2) (except 
in the case of an employee described in subsection (c)(1)(B)), (j), and 
(k) of section 51, shall apply for purposes of this section.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
and guidance as are necessary to carry out the purposes of this 
section, including procedures for the quarterly payment of the credit 
allowed under this section.
    ``(g) Termination.--This section shall not apply to individuals who 
begin work for the employer after the date which is 3 years after the 
date of the enactment of this section.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36B,'' after ``36A,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting before the item relating to section 37 
        the following new item:

``Sec. 36B. Initial hires by small businesses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after the date of 
the enactment of this Act.

SEC. 3. CREDIT FOR EMPLOYEE HEALTH INSURANCE 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) is amended by inserting after section 45Q the following:

``SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible small employer, the small employer health insurance credit 
determined under this section for any taxable year is the amount 
determined under subsection (b).
    ``(b) Health Insurance Credit Amount.--Subject to subsection (c), 
the amount determined under this subsection with respect to any 
eligible small employer is equal to 35 percent (25 percent in the case 
of a tax-exempt eligible small employer) of the aggregate amount of 
nonelective contributions the employer made on behalf of its employees 
during the taxable year under the arrangement described in subsection 
(d)(4) for premiums paid for health insurance coverage (within the 
meaning of section 9832(b)(1)) of such employees if each employee taken 
into account under paragraph (1) had enrolled in such coverage which 
had a premium equal to the average premium (as determined by the 
Secretary of Health and Human Services) for the small group market in 
the State in which the employer is offering health insurance coverage 
(or for such area within the State as is specified by the Secretary).
    ``(c) Phaseout of Credit Amount Based on Number of Employees and 
Average Wages.--The amount of the credit determined under subsection 
(b) without regard to this subsection shall be reduced (but not below 
zero) by the sum of the following amounts:
            ``(1) Such amount multiplied by a fraction the numerator of 
        which is the total number of full-time equivalent employees of 
        the employer in excess of 10 and the denominator of which is 
        15.
            ``(2) Such amount multiplied by a fraction the numerator of 
        which is the average annual wages of the employer in excess of 
        the dollar amount in effect under subsection (d)(3)(B) and the 
        denominator of which is such dollar amount.
    ``(d) Eligible Small Employer.--For purposes of this section--
            ``(1) In general.--The term `eligible small employer' 
        means, with respect to any taxable year, an employer--
                    ``(A) which has no more than 25 full-time 
                equivalent employees for the taxable year,
                    ``(B) the average annual wages of which do not 
                exceed an amount equal to twice the dollar amount in 
                effect under paragraph (3)(B) for the taxable year, and
                    ``(C) which has in effect an arrangement described 
                in paragraph (4).
            ``(2) Full-time equivalent employees.--
                    ``(A) In general.--The term `full-time equivalent 
                employees' means a number of employees equal to the 
                number determined by dividing--
                            ``(i) the total number of hours of service 
                        for which wages were paid by the employer to 
                        employees during the taxable year, by
                            ``(ii) 2,080.
                Such number shall be rounded to the next lowest whole 
                number if not otherwise a whole number.
                    ``(B) Excess hours not counted.--If an employee 
                works in excess of 2,080 hours of service during any 
                taxable year, such excess shall not be taken into 
                account under subparagraph (A).
                    ``(C) Hours of service.--The Secretary, in 
                consultation with the Secretary of Labor, shall 
                prescribe such regulations, rules, and guidance as may 
                be necessary to determine the hours of service of an 
                employee, including rules for the application of this 
                paragraph to employees who are not compensated on an 
                hourly basis.
            ``(3) Average annual wages.--
                    ``(A) In general.--The average annual wages of an 
                eligible small employer for any taxable year is the 
                amount determined by dividing--
                            ``(i) the aggregate amount of wages which 
                        were paid by the employer to employees during 
                        the taxable year, by
                            ``(ii) the number of full-time equivalent 
                        employees of the employee determined under 
                        paragraph (2) for the taxable year.
                Such amount shall be rounded to the next lowest 
                multiple of $1,000 if not otherwise such a multiple.
                    ``(B) Dollar amount.--For purposes of paragraph 
                (1)(B) and subsection (c)(2), the dollar amount in 
                effect under this paragraph is $25,000.
            ``(4) Contribution arrangement.--An arrangement is 
        described in this paragraph if it requires an eligible small 
        employer to make a nonelective contribution on behalf of each 
        employee who enrolls in a health plan offered to employees by 
        the employer in an amount equal to a uniform percentage (not 
        less than 50 percent) of the premium cost of such plan.
            ``(5) Seasonal worker hours and wages not counted.--For 
        purposes of this subsection--
                    ``(A) In general.--The number of hours of service 
                worked by, and wages paid to, a seasonal worker of an 
                employer shall not be taken into account in determining 
                the full-time equivalent employees and average annual 
                wages of the employer unless the worker works for the 
                employer on more than 120 days during the taxable year.
                    ``(B) Definition of seasonal worker.--The term 
                `seasonal worker' means a worker who performs labor or 
                services on a seasonal basis as defined by the 
                Secretary of Labor, including workers covered by 
                section 500.20(s)(1) of title 29, Code of Federal 
                Regulations and retail workers employed exclusively 
                during holiday seasons.
    ``(e) Other Rules and Definitions.--For purposes of this section--
            ``(1) Employee.--
                    ``(A) Certain employees excluded.--The term 
                `employee' shall not include--
                            ``(i) an employee within the meaning of 
                        section 401(c)(1),
                            ``(ii) any 2-percent shareholder (as 
                        defined in section 1372(b)) of an eligible 
                        small business which is an S corporation,
                            ``(iii) any 5-percent owner (as defined in 
                        section 416(i)(1)(B)(i)) of an eligible small 
                        business, or
                            ``(iv) any individual who bears any of the 
                        relationships described in subparagraphs (A) 
                        through (G) of section 152(d)(2) to, or is a 
                        dependent described in section 152(d)(2)(H) of, 
                        an individual described in clause (i), (ii), or 
                        (iii).
                    ``(B) Leased employees.--The term `employee' shall 
                include a leased employee within the meaning of section 
                414(n).
            ``(2) Nonelective contribution.--The term `nonelective 
        contribution' means an employer contribution other than an 
        employer contribution pursuant to a salary reduction 
        arrangement.
            ``(3) Wages.--The term `wages' has the meaning given such 
        term by section 3121(a) (determined without regard to any 
        dollar limitation contained in such section).
            ``(4) Aggregation and other rules made applicable.--
                    ``(A) Aggregation rules.--All employers treated as 
                a single employer under subsection (b), (c), (m), or 
                (o) of section 414 shall be treated as a single 
                employer for purposes of this section.
                    ``(B) Other rules.--Rules similar to the rules of 
                subsections (c), (d), and (e) of section 52 shall 
                apply.
    ``(f) Credit Made Available to Tax-Exempt Eligible Small 
Employers.--
            ``(1) In general.--In the case of a tax-exempt eligible 
        small employer, there shall be treated as a credit allowable 
        under subpart C (and not allowable under this subpart) the 
        lesser of--
                    ``(A) the amount of the credit determined under 
                this section with respect to such employer, or
                    ``(B) the amount of the payroll taxes of the 
                employer during the calendar year in which the taxable 
                year begins.
            ``(2) Tax-exempt eligible small employer.--For purposes of 
        this section, the term `tax-exempt eligible small employer' 
        means an eligible small employer which is any organization 
        described in section 501(c) which is exempt from taxation under 
        section 501(a).
            ``(3) Payroll taxes.--For purposes of this subsection--
                    ``(A) In general.--The term `payroll taxes' means--
                            ``(i) amounts required to be withheld from 
                        the employees of the tax-exempt eligible small 
                        employer under section 3401(a),
                            ``(ii) amounts required to be withheld from 
                        such employees under section 3101(b), and
                            ``(iii) amounts of the taxes imposed on the 
                        tax-exempt eligible small employer under 
                        section 3111(b).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(g) Application of Section for Calendar Years 2010, 2011, and 
2012.--This section shall apply for any taxable year beginning in 2010, 
2011, or 2012.
    ``(h) Insurance Definitions.--Any term used in this section which 
is also used in the Public Health Service Act shall have the meaning 
given such term by such Act.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the provisions of this section, 
including regulations to prevent the avoidance of the limitations under 
subsection (c) through the use of multiple entities.''.
    (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 (34), 
by striking the period at the end of paragraph (35) and inserting ``, 
plus'', and by inserting after paragraph (35) the following:
            ``(36) the small employer health insurance credit 
        determined under section 45R.''.
    (c) Credit Allowed Against Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by redesignating clauses (vi), (vii), and (viii) as 
clauses (vii), (viii), and (ix), respectively, and by inserting after 
clause (v) the following new clause:
                            ``(vi) the credit determined under section 
                        45R,''.
    (d) Disallowance of Deduction for Certain Expenses for Which Credit 
Allowed.--
            (1) In general.--Section 280C of the Internal Revenue Code 
        of 1986 (relating to disallowance of deduction for certain 
        expenses for which credit allowed) is amended by adding at the 
        end the following new subsection:
    ``(g) Credit for Employee Health Insurance Expenses of Small 
Employers.--No deduction shall be allowed for that portion of the 
premiums for health insurance coverage paid by an employer which is 
equal to the amount of the credit determined under section 45R(a) with 
respect to the premiums.''.
            (2) Deduction for expiring credits.--Section 196(c) of such 
        Code is amended by striking ``and'' at the end of paragraph 
        (12), by striking the period at the end of paragraph (13) and 
        inserting ``, and'', and by adding at the end the following new 
        paragraph:
            ``(14) the small employer health insurance credit 
        determined under section 45R(a).''.
    (e) 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. 45R. Employee health insurance expenses of small employers.''.
    (f) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to amounts paid or incurred in taxable years beginning 
        after December 31, 2009.
            (2) Minimum tax.--The amendments made by subsection (c) 
        shall apply to credits determined under section 45R of the 
        Internal Revenue Code of 1986 in taxable years beginning after 
        December 31, 2009, and to carrybacks of such credits.

SEC. 4. SURCHARGE ON HIGH INCOME INDIVIDUALS.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

           ``PART VIII--SURCHARGE ON HIGH INCOME INDIVIDUALS

``Sec. 59B. Surcharge on high income individuals.

``SEC. 59B. SURCHARGE ON HIGH INCOME INDIVIDUALS.

    ``(a) General Rule.--In the case of a taxpayer other than a 
corporation, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a tax equal to the applicable percentage of 
so much of the modified adjusted gross income of the taxpayer as 
exceeds $1,000,000.
    ``(b) Taxpayers Not Making a Joint Return.--In the case of any 
taxpayer other than a taxpayer making a joint return under section 6013 
or a surviving spouse (as defined in section 2(a)), subsection (a) 
shall be applied by substituting `$500,000' for `$1,000,000'.
    ``(c) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage for any taxable year shall be the percentage 
necessary to ensure that the effect of the provisions of, and 
amendments made by, the Boosting Entrepreneurship and New Jobs Act are 
and remain budget neutral.
    ``(d) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income reduced by any deduction (not taken into account in determining 
adjusted gross income) allowed for investment interest (as defined in 
section 163(d)). In the case of an estate or trust, adjusted gross 
income shall be determined as provided in section 67(e).
    ``(e) Special Rules.--
            ``(1) Nonresident alien.--In the case of a nonresident 
        alien individual, only amounts taken into account in connection 
        with the tax imposed under section 871(b) shall be taken into 
        account under this section.
            ``(2) Citizens and residents living abroad.--The dollar 
        amount in effect under subsection (a) (after the application of 
        subsection (b)) shall be decreased by the excess of--
                    ``(A) the amounts excluded from the taxpayer's 
                gross income under section 911, over
                    ``(B) the amounts of any deductions or exclusions 
                disallowed under section 911(d)(6) with respect to the 
                amounts described in subparagraph (A).
            ``(3) Charitable trusts.--Subsection (a) shall not apply to 
        a trust all the unexpired interests in which are devoted to one 
        or more of the purposes described in section 170(c)(2)(B).
            ``(4) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter or for 
        purposes of section 55.''.
    (b) Clerical Amendment.--The table of parts for subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

         ``part viii. surcharge on high income individuals.''.

    (c) Section 15 Not To Apply.--The amendment made by subsection (a) 
shall not be treated as a change in a rate of tax for purposes of 
section 15 of the Internal Revenue Code of 1986.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

SEC. 5. DIRECT LOANS TO SMALL BUSINESS CONCERNS.

    (a) Definitions.--In this section--
            (1) the term ``Administrator'' means the Administrator of 
        the Small Business Administration;
            (2) the term ``eligible small business concern'' means a 
        small business concern with fewer than 25 employees;
            (3) the term ``Secretary'' means the Secretary of the 
        Treasury; and
            (4) the term ``small business concern'' has the meaning 
        given that term under section 3 of the Small Business Act (15 
        U.S.C. 632).
    (b) Loan Program Established.--The Administrator and the Secretary 
shall jointly establish a program to make loans to eligible small 
business concerns.
    (c) Terms and Conditions.--A loan under this section shall have the 
same terms and conditions as, and may be used for any purpose 
authorized for, a direct loan under section 7(a) of the Small Business 
Act (15 U.S.C. 636(a)), as amended by this Act.
    (d) Funding.--Of amounts made available under section 115 of the 
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5225) and not 
otherwise obligated, $30,000,000,000, shall be available to the 
Administrator and the Secretary to carry out this section.

SEC. 6. EXTRAMURAL RESEARCH AND DEVELOPMENT BUDGET OF THE NATIONAL 
              INSTITUTES OF HEALTH.

    Title VIII of division A of the American Recovery and Reinvestment 
Act of 2009 (Public Law 111-5; 123 Stat. 176) is amended in the matter 
under the heading ``office of the director'' under the heading 
``National Institutes of Health'' under the heading ``DEPARTMENT OF 
HEALTH AND HUMAN SERVICES'', by inserting after ``638(n)(1):'' the 
following: ``Provided further, That not later than September 30, 2010, 
of the amount appropriated under this heading, $150,000,000 shall be 
obligated to be expended with the programs of the National Institutes 
of Health described in the previous proviso:''.

SEC. 7. SECTION 7(A) BUSINESS LOANS.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
amended--
            (1) in paragraph (2)(A), by striking ``equal to--'' and all 
        that follows and inserting equal to ``90 percent of the balance 
        of the financing outstanding at the time of the disbursement of 
        the loan.''; and
            (2) in paragraph (3)(A), by striking ``$1,500,000 (or if 
        the gross loan amount would exceed $2,000,000'' and inserting 
        ``$4,500,000 (or if the gross loan amount would exceed 
        $5,000,000''.

SEC. 8. MICROLOAN PROGRAM.

    (a) Marketing, Management, and Technical Assistance Grants.--
Section 7(m)(4) of the Small Business Act (15 U.S.C. 636(m)(4)) is 
amended--
            (1) in subparagraph (A)--
                    (A) in the first sentence, by striking ``and 
                subject to subparagraph (B)''; and
                    (B) in the second sentence--
                            (i) by striking ``each intermediary meeting 
                        the requirements of subparagraph (B)'' and 
                        inserting ``an intermediary''; and
                            (ii) by striking ``25 percent'' and 
                        inserting ``50 percent'';
            (2) by striking subparagraph (B); and
            (3) by striking subparagraph (C)(iii).
    (b) Microloan Amounts.--Section 7(m) of the Small Business Act (15 
U.S.C. 636(m)) is amended--
            (1) in paragraph (1)(B)(iii), by striking ``$35,000'' and 
        inserting ``$50,000'';
            (2) in paragraph (3)(E), by striking ``$35,000'' each place 
        it appears and inserting ``$50,000''; and
            (3) in paragraph (11)(B), by striking ``$35,000'' and 
        inserting ``$50,000''.

SEC. 9. MAXIMUM LOAN AMOUNTS UNDER 504 PROGRAM.

    Section 502(2)(A) of the Small Business Investment Act of 1958 (15 
U.S.C. 696(2)(A)) is amended--
            (1) in clause (i), by striking ``$1,500,000'' and inserting 
        ``$5,000,000'';
            (2) in clause (ii), by striking ``$2,000,000'' and 
        inserting ``$5,000,000''; and
            (3) in clause (iii), by striking ``$4,000,000'' and 
        inserting ``$5,500,000''.

SEC. 10. SENSE OF CONGRESS REGARDING CABINET LEVEL STATUS FOR THE 
              ADMINISTRATOR OF THE SMALL BUSINESS ADMINISTRATION.

    It is the sense of Congress that the President should designate the 
Administrator of the Small Business Administration to serve as a member 
of the Cabinet.

SEC. 11. SENSE OF CONGRESS REGARDING FINANCIAL SUPPORT FOR SMALL 
              BUSINESSES BY CERTAIN FINANCIAL INSTITUTIONS.

    It is the sense of Congress that--
            (1) financial institutions that have benefitted from the 
        support of the Federal Government have a responsibility to 
        bolster the economy of the United States by providing needed 
        capital to small business concerns; and
            (2) well-capitalized banks, which have returned to 
        profitability and have the resources to increase access to 
        capital, should adapt their lending practices to ensure that 
        qualified small business concerns can grow and the economy of 
        the United States can continue to recover.
                                 <all>