Rice, Bustos, Garbarino, Crow Unveil New Business Succession Planning Legislation

Press Release

Representatives Tom Rice (SC-07), Cheri Bustos (IL-17), Andrew Garbarino (NY-02), and Jason Crow (CO-06) unveiled new bipartisan legislation that would provide small business owners the support needed to create a business succession plan.

"In the United States there are nearly 30 million small businesses, but less than 42% have succession plans. Incentivizing succession plans through a small tax credit will not only benefit the business, but will also benefit the business's community," said Rep. Rice. "Small businesses are the backbone of our economy. I am proud to introduce this legislation that focuses on the future and gives small businesses access to the tools they need to succeed, no matter what life throws at them."

"When even one small business closes, an entire community loses. With the global pandemic forcing many of our small business owners to take a new approach to keeping their business healthy, succession planning has become more critical than ever before," said Rep. Bustos. "I am proud to introduce the Small Business Succession Planning Act today with Reps. Garbarino, Crow and Rice. This bipartisan legislation will help give our small businesses the tools they need to build a healthy financial future for themselves and their communities."

"As a third-generation Long Islander and small business owner, I know first-hand the blood, sweat, and tears small businesses owners pour into ensuring their businesses are a success. Unfortunately, more than half of our nation's small business owners do not have a succession plan in place -- leaving small businesses, which are pillars in our communities, vulnerable to closure," said Rep. Garbarino. "I'm proud to join my colleagues in introducing commonsense legislation to better equip our small business community with tools to develop succession plans and build-upon framework I've laid out as a former assemblyman and private practice attorney."

"Small businesses are not just the lifeblood of our economy - they help families build wealth and security, especially underserved and immigrant business owners," said Rep. Crow. "But too many small businesses do not have a plan for succession, resulting in business closures or forced sales. Small business owners work hard and often spend their lives building their businesses. This bipartisan legislation gives them the tools they need to plan for the future."

A small business closing can have a significant impact on the larger town or city where the business is located. Small businesses drive local economies and offer employment opportunities, services to other businesses and build wealth for the community as a whole.

Currently, more than 58 percent of business owners have no succession plan and 47 percent of business owners over the age of 65 have no plan. That includes Baby Boomers, who own 2.34 million small businesses in the U.S. and employ more than 25 million people.

The Small Business Succession Planning Act would:

Direct the Small Business Administration (SBA) to create an online business succession planning toolkit that walks small businesses through the process of creating a business succession plan with the help of SBA or resource partners. It would also require the SBA to provide trained staff or partners to help small businesses create their plan;
Encourage the SBA to hold business succession planning workshops or events across the country;
Create a plan to increase business succession plans among small businesses, including among minority-owned businesses, through the SBA;
Incentivize small businesses owners to create their own plan through multiple tax breaks for businesses:
This includes a one-time $250 tax break to create a business succession plan and an additional one-time $250 tax break when the succession plan is executed.
The legislation is endorsed by 18 national, state and local-level small business organizations, including:

The National Small Business Association (NSBA), Illinois Farm Bureau (IFB), Rockford Chamber of Commerce, Quad Cities Chamber of Commerce, Peoria Chamber of Commerce, Greater Quad Cities Hispanic Chamber of Commerce, the East Peoria Chamber of Commerce, Sauk Valley Area Chamber of Commerce, Monmouth Area Chamber of Commerce, Northwestern Illinois Economic Development, the Knox County Area Partnership for Economic Development, Mercer County Better Together, Spoon River Partnership for Economic Development, Greater Sterling Development Corporation, Kewanee Chamber of Commerce, Hanover Chamber of Commerce, Pekin Area Chamber of Commerce and Freeport Area Chamber of Commerce.