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.

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:

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.

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:

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.

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:

VIII

Surcharge on high income individuals

Sec. 59B. Surcharge on high income individuals.

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.

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.

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:.

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.

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.

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.

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.

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.