S Amdt 4519 - Small Business Lending Fund and Tax Law Amendments - Key Vote
National Key Votes
- HR 5297 - Small Business Lending Fund and Tax Law Amendments
- S Amdt 4519 - Small Business Lending Fund and Tax Law Amendments
- S Amdt 4595 - Business Transaction Reporting Requirement Amendments
- S Amdt 4596 - Repealing Business Transaction Reporting Requirements
Legislation - Cloture Not Invoked (Senate) (58-42) - July 29, 2010(Key vote)
Title: Small Business Lending Fund and Tax Law Amendments
Vote to invoke cloture on an amendment to HR 5297 that establishes the Small Business Lending Fund to fund capital investments to financial institutions to provide loans to small businesses, establishes the Small Business Credit Initiative to fund state capital access programs for small businesses, and expands various tax deductions.
- Establishes the Small Business Lending Fund (SBLF) within the Department of Treasury in which the Secretary of the Treasury is authorized to appropriate up to $30 billion for capital investments to the following (Sec. 4103):
- Financial institutions with assets of $1 billion or less, provided that such investment does not exceed 5 percent of risk-weighted assets; and
- Financial institutions with assets of more than $1 billion but no more than $10 billion, provided that such investment does not exceed 3 percent of risk-weighted assets.
- Requires the Department of Treasury to purchase preferred stock and other financial instruments from financial institutions to finance capital investments from the the SBLF, and specifies that such preferred stock and other financial instruments shall be repaid within 10 years, or be subject to additional terms as determined by the Secretary, including, but not limited to, that the stock carry the highest dividend or interest rate payable (Sec. 4103).
- Requires the funds received in connection with the investments made from the SBLF shall be paid into the General Fund of the Department of Treasury for reduction of the public debt (Sec. 4103).
- Requires a financial institution to submit with an application for a capital investment from the SBLF a "small business lending plan" that describes the strategy and operating goals to "address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate" (Sec. 4103).
- Authorizes financial institutions that are community development loan funds to apply to receive capital investments from the SBLF, provided such investment does not exceed 5 percent of total assets (Sec. 4103).
- Prohibits financial institutions from receiving capital investments from the SBLF if they are on the Federal Deposit Insurance Corporation's (FDIC) "problem bank list" (current rating of 4 or 5 under the Uniform Financial Institutions Rating System, or other designation as determined by the FDIC), or have been removed from such list in the last 90 days (Sec. 4103).
- Requires the Secretary of the Treasury to consider the following when considering applications for capital investments from the SBLF (Sec. 4105):
- Increasing the availability of credit for small businesses;
- Providing funding to minority-owned eligible institutions and other institutions that serve small businesses that are owned by minorities, veterans, and women, and that serve low to moderate-income, minority, and other "underserved" or rural communities;
- Protecting and increasing American jobs;
- Increasing the opportunity for small business development in areas with unemployment rates that exceed the national average;
- Ensuring that financial institutions may apply for capital investments without discrimination based on geography;
- Providing transparency with respect to the use of funds;
- Minimizing the costs to taxpayers;
- Promoting and engaging in financial education to would-be borrowers; and
- Providing funding to financial institutions that serve small businesses directly affected by the Deepwater Horizon oil spill, particularly states along the Gulf of Mexico.
- Establishes the Small Business Credit Initiative (SBCI) within the Department of Treasury through which the Secretary of the Treasury is required to allocate $1.5 billion, excluding amounts used for administrative costs, to States for capital access programs for small businesses, and specifies that the amount of SBCI funds allocated to states is contingent on the state's employment declines in 2008 and 2009 (Secs. 3003 & 3009).
- Requires state capital access programs to meet the following criteria to receive funding from the SBCI (Sec. 3005):
- Provides portfolio insurance for business loans based on a separate loan-loss reserve fund for each financial institution;
- Requires insurance premiums to be paid by the financial institution lenders and by the business borrowers to the reserve fund to have their loans enrolled in the reserve fund;
- Provides for contributions to be made by the state to the reserve fund in amounts at least equal to the sum of the amount of the insurance premium charges paid by the borrower and the financial institution to the reserve fund for any newly enrolled loan; and
- Provides its portfolio insurance solely for loans that do not exceed $5 million for borrowers that have 500 employees or less at the time the loan is enrolled in the program.
- Requires states to submit with an application for SBCI funding for a capital access program, a report stating how the state plans to use the funds to provide access to capital for small businesses in low to moderate-income, minority, and other "underserved communities," including women and minority owned small businesses (Sec. 3005).
- Limits insurance premium charges for loans approved by state capital access programs and funded by the SBCI to a range of 2 percent to 7 percent of the amount of the loan (Sec. 3005).
- Expands the income tax exemption for small business stock from 50 percent of any sale or gain such stock to 100 percent for stock acquired after the date of enactment through January 1, 2011 (Sec. 2011).
- Authorizes self-employed individuals to deduct their health insurance costs from their tax liability for the 2010 taxable year (Sec. 2042).
- Authorizes the Administrator of the SBA to provide open-end extension of credit under the Floor Plan Financing Program to small businesses for the purchase of automobiles, recreational vehicles, boats, and manufactured homes for another 5 years, provided an extension of credit is between $500,000 and $5 million (Sec. 1133).
- Expands the participation of the SBA in small business loans (15 USC 636) as follows (Sec. 1111):
- For loans in which the balance of the financing outstanding at the time of disbursement exceeds $150,000, the rate is increased from 75 percent to 90 percent of the balance; and
- For loans in which the balance of the financing outstanding at the time of disbursement is less than $150,000, the rate is increased from 85 percent to 90 percent of the balance.
- Increases the maximum amount of loans the SBA is authorized to issue for plant acquisition, construction, conversion, or expansion (15 USC 696) as follows (Sec. 1112):
- For small businesses, the limit is increased from $1.5 million or $2 million, depending on the purpose of the loan, to $5 million;
- For small manufacturers, the limit is increased from $4 million to $5.5 million;
- For projects that reduce a borrower's energy consumption by at least 10 percent, the limit is increased from $4 million to $5.5 million; and
- For projects that generate renewable energy or renewable fuels, the limit is increased from $4 million to $5.5 million.
NOTE: INVOKING CLOTURE REQUIRES A 3/5 MAJORITY OF THE SENATE. IT IS NOT A VOTE ON THE PASSAGE OF THE PIECE OF LEGISLATION, BUT LIMITS FURTHER DEBATE TO 30 HOURS. CLOTURE IS TYPICALLY USED TO END A FILIBUSTER. A FAILED CLOTURE VOTE OFTEN PREVENTS THE LEGISLATION FROM EVER COMING TO A VOTE.
NOTE: THIS IS A SUBSTITUTE AMENDMENT, WHICH REPLACES THE ENTIRE TEXT OF THE LEGISLATION WITH A NEW TEXT. THE DEGREE TO WHICH THE SUBSTITUTE BILL TEXT DIFFERS FROM THE PREVIOUS VERSION OF THE TEXT CAN VARY GREATLY.
Legislation - Introduced (Senate) - July 27, 2010
Title: Small Business Lending Fund and Tax Law Amendments